According to data from Cox Automotive, used car prices are expected to fall more than previously anticipated this year.

Cox Automotive said that rising electric vehicle sales and an increasing number of lease-return vehicles are reshaping the used car market; this quarter, the resale values of EVs and small fuel-efficient models have risen.

Consumers are grappling with cost pressures from high fuel prices and widespread inflation.

On February 15, 2023, in Glendale, California, consumers were browsing vehicles at a used car lot.

As high fuel prices and broad inflation erode Americans' wallets, the projected decline in used car prices this year will exceed earlier expectations.

Cox Automotive on Wednesday lowered its full-year forecast for its Manheim Used Vehicle Value Index, cutting the expected annual gain to just 0.2%.

This slight increase marks the third consecutive year that used car prices have remained in a narrow range; during the pandemic, used car prices experienced a sharp surge followed by a pullback.

The index fell 1.95% cumulatively in the third quarter from July to September, with the index down 0.6% year-over-year in September.

This is the first year-over-year decline in the index since March 2025.

Cox Automotive Chief Economist Jeremy Robb said in a statement: "Entering the fourth quarter, interest rates remain elevated and consumer confidence has retreated, but the wealth effect from continued strength in financial assets has provided some cushion. Many of the indicators we track are returning to pre-pandemic norms, but the path back is by no means smooth."

The Manheim Index has historically averaged a year-over-year gain of about 2.3%.

Cox Automotive said that due to accelerated vehicle depreciation in the third quarter, unadjusted wholesale used car prices fell 1.2% year-over-year in September and 1.3% from August.

The Manheim Index is a closely watched bellwether for used car prices, tracking transaction prices for used vehicles in the U.S. Manheim wholesale auction market.

Retail prices for ordinary consumers typically follow changes in wholesale costs.

Cox Automotive noted that rising EV sales and growing volumes of lease-return vehicles are reshaping the used car market: this quarter, the value of EVs and small fuel-efficient models rose, while large pickups and SUVs underperformed.

Robb said: "Even with fuel prices rising, the used car market saw above-normal price increases in the first half of this year. But as the Middle East conflict continues, diesel prices hit record highs, and interest rates climb rapidly, concerns among businesses and consumers have intensified, weighing on wholesale prices."

As small fuel-efficient models and large vehicles diverge, American Automobile Association (AAA) data shows that the national average gasoline price in September reached $4.33 per gallon, 50 cents higher than the previous record of $3.83 set in September 2023.

Cox Automotive said that retail demand for used cars is generally decent, but price movements indicate that dealers' asking prices have hit a ceiling.

Data from Cox Automotive shows that as of August, the average listing price for used cars was $27,239, while the average price of new vehicles has exceeded $50,000.

Because used cars are more affordable than new ones, most American consumers choose to buy used vehicles.