By Rob Sabo

Increased buyer demand and shrinking inventory continue to push used car prices higher, with wholesale prices up by 2.4 percent year over year in January, the largest since July 2025 and far exceeding the 0.4 percent increase in December 2025, a new report from Cox Automotive said.

Wholesale supply in January dropped by 5.1 days from a month earlier to 26.6 days, Cox Automotive noted on Feb. 6 in its Manheim Used Vehicle Value Index (MUVVI), which measures pricing trends across the auto industry. Its sister publication, the Manheim Market Report, is used to value about 99 percent of used car listings at Manheim wholesale auctions or trade-ins at automotive dealerships.

Used car values jumped more than what was expected for the month, said Jeremy Robb, who took the helm as Cox Automotive’s chief economist on Feb 3. January’s wholesale used car values also grew 2.4 percent from December 2025, giving the MUVVI its highest reading since September 2023.

“We had planned for a stronger January from a pricing perspective, but wholesale values moved even faster than we expected on the back of strong retail demand,” Robb said.

“With tax refund season officially starting last week, we are expecting that more consumers will be getting refunds—and that the size of those refunds will hit a new record. Those factors should help consumers punch the ticket on some big-ticket purchases, even as we have seen a more muted impact on market interest rates in the face of three Fed cuts since September.”

Spring typically provides a lift to wholesale market pricing, Robb added, but the early acceleration on values and reduced supply could lead an extended pricing rally.

Wholesale prices for used compact cars actually declined 0.2 percent from year earlier values, while midsize vehicles saw a modest 0.1 percent increase. Values for luxury vehicles, however, saw the largest monthly year-over-year gains, at 1.6 percent—a trend that held steady for most of 2025, Cox Automotive reported.

Wholesale values on electric vehicles (EVs) ticked up nearly 1 percent and remain elevated from the same period in 2025, when higher vehicle depreciation eroded resale prices across the EV sector for the first half of the year, Cox added.

Auto dealerships had a total supply of roughly 2.2 million used cars on their lots to start the year, with an average listing price of just over $26,000, Cox Automotive added.

In other recent automotive news, total fleet vehicle sales in January spiked 10.3 percent from year earlier figures. Fleet sales for the month totaled almost 229,000 vehicles, with 179,885 light vehicles sold into commercial and rental fleets, and 18,028 sold into federal fleet programs.

The seasonally adjusted vehicle sales rate for January, meanwhile, was forecast to tally 15.3 million vehicles, Cox Automotive reported. New vehicle sales volume was expected to decline by 23.5 percent from December 2025, but a January sales swoon is common in the automotive industry, said Cox Automotive senior economist Charles Chesbrough.

“The new-vehicle sales pace always slows after the holiday shopping season, and this year is no exception,” he said.

“The market is slowing due to ongoing concerns about the U.S. economy and persistently high new-vehicle prices. These market conditions are expected to be major headwinds for the new market throughout 2026.”