The U.S. used car market is showing an unusual level of price stability even as supply tightens and consumer demand remains strong, challenging typical market expectations.
New data from Cox Automotive shows that the average listing price for a used vehicle in March stood at $25,390, representing a modest 0.7% increase from February. The limited price movement comes despite declining inventory levels and sustained buyer activity across the country.
Used vehicle supply has been steadily contracting, with dealer inventory falling for three consecutive months to its lowest level since 2019. In March, dealers held around 1.95 million used vehicles, a 5.9% decrease compared with the same period a year earlier. Under normal market conditions, such a significant drop in supply would typically drive sharper price increases.
Analysts suggest that seasonal factors may be partially moderating price growth. March is traditionally a strong sales month as consumers often use tax refunds to make large purchases, temporarily boosting demand. However, a more influential factor appears to be the persistently high cost of new vehicles, which continues to push buyers toward the used market in search of affordability.
Despite limited inventory, sales activity has remained strong. Retail used-vehicle sales reached an estimated 1.62 million units in March, rising from 1.37 million in February and marking the highest level in a year, according to industry data reported by Scott Vanner. The daily sales pace also increased by 7% month-on-month, although total sales were still 2.9% lower compared with the same period last year.
The supply squeeze is most visible in the lower-priced segment. Vehicles priced under $15,000 are particularly scarce, with inventory levels covering just 27 days of supply—well below the typical average by 11 days. This shortage reflects strong demand from budget-conscious buyers who are prioritizing affordability over other factors.
Consumer preferences further highlight this trend. Among the five best-selling used vehicles, the average transaction price was $23,861, roughly 6% below the overall market average. This suggests that buyers are actively targeting lower-priced options, even if it means accepting higher mileage, fewer features, or older model years.
At the same time, demand for certified pre-owned (CPO) vehicles is weakening. These vehicles, which typically offer extended warranties and undergo rigorous inspections, saw sales fall 11.2% compared with March 2025. Although CPO sales increased 9.2% from February to an estimated 221,840 units, their share of total used-vehicle sales declined to 13.7% from 14.7% the previous month.
The drop in CPO share indicates that many consumers are now prioritizing immediate cost savings over additional protection and long-term ownership benefits. Analysts say this shift reflects growing affordability pressures in the broader automotive market.
Overall, the U.S. used car sector remains in a rare equilibrium. While supply is tightening and demand remains resilient—supported in part by high new vehicle prices—price growth has stayed relatively subdued. Market observers say the coming months will depend heavily on whether inventory levels recover and how broader economic conditions influence consumer spending.
