Used car costs leap forward of spring promoting season optimism

A used automotive dealership is seen in Annapolis, Maryland on Could 27, 2021, as many automotive dealerships throughout the nation are working low on new automobiles as a pc chip scarcity has prompted manufacturing at many car manufactures to almost cease.

Jim Watson | AFP | Getty Pictures

DETROIT — A carefully watched barometer for used car pricing jumped final month as sellers sped to extend inventories amid expectations of a strong spring promoting season.

Cox Automotive on Friday reported its Manheim Used Car Worth Index — which tracks costs of used automobiles bought at its U.S. wholesale auctions — elevated 4% in February in contrast with a 12 months earlier, to a stage of 212.3. That was up 0.8% from January and marks the index’s highest stage since September 2023.

“Because the begin of 2026, we have seen principally stable demand at Manheim with larger gross sales conversion charges indicating an urge for food from sellers to purchase. As we progressed by February, we noticed costs transfer larger than common, particularly within the again half of the month,” stated Jeremy Robb, Cox chief economist.

Robb stated the shopping for optimism was fueled by anticipated larger tax returns for American shoppers, which offset broader financial and geopolitical issues. Nevertheless, the conflict in Iran introduces dangers to the financial system and will “put a damper on shopper urge for food within the quick run,” he stated.

“This might sluggish the constructing tempo we see on the again of tax refund season, significantly as fuel costs rise. All in, the affect could also be extra acutely felt early within the month, with a pickup in demand constructing as we transfer by March,” Robb stated.

Used car costs stay excessive in contrast with historic ranges however are off from report highs in the course of the coronavirus pandemic, when resilient demand and low inventories inflated costs. Retail costs for shoppers historically observe adjustments in wholesale costs.

The common itemizing worth for a used car in January was $25,533. That compares to greater than $28,000 in 2022, in response to Cox.

Firstly of the 12 months, Cox stated it anticipated wholesale costs on its Manheim Used Car Worth Index to finish this 12 months 2% larger than December 2025.