Used car prices fell by 1.6% in April, marking the first decline since November 2025, according to Cox Automotive's Manheim Used Vehicle Value Index. The drop coincides with rising gas prices, which reached a national average of $4.56 per gallon as of May 7, up $1.12 from a year earlier. The decline follows a strong spring selling season fueled by tax refunds, but affordability remains a key concern for buyers.
Core Facts & Developments
- Used car prices dropped 1.6% in April, the first decline since November 2025.
- Rising gas prices, averaging $4.56 per gallon, are dampening consumer spending.
Deeper Dive & Context
Market Trends and Consumer Behavior
The decline aligns with seasonal patterns, though the broader economic context—including geopolitical tensions and energy price volatility—has intensified affordability concerns. Cox Automotive reports that demand for older vehicles and electric vehicles (EVs) has increased as buyers seek cost-effective alternatives. The average listed price of a used vehicle was $25,390 in March, up $100 from February, while used EVs remain significantly more expensive, averaging $9,200 above the market.
Economic and Policy Factors
The conflict in the Middle East has contributed to rising energy prices, which have soared 47% since late February. Higher gas prices are reducing disposable income, limiting consumer spending on used vehicles. Meanwhile, the end of federal EV incentives under the Trump administration initially slowed EV sales, but rising gas prices have since revived demand. Cox Automotive forecasts wholesale used car prices to rise at a stable rate of about 2% this year, with retail prices typically following wholesale trends.
Industry and Analyst Perspectives
Cox Automotive chief economist Jeremy Robb noted that energy price volatility is absorbing consumer spending power, with no immediate end in sight. The Manheim Electric Vehicle Index rose 7.2% year-over-year and 1.4% from March, reflecting growing interest in EVs amid high gas costs.