American consumers who are in the market for used cars are facing the highest prices in nearly three years, according to a new report.
Wholesale prices for used vehicles rose to their highest level since the summer of 2023 in March, with the Manheim Used Vehicle Value Index rising 6.2% year over year to a reading of 215.3.
Data from Manheim, a Cox Automotive brand and the largest wholesale marketplace in the U.S., found that demand for used vehicles remains strong. Values rose 1.4% in the month of March, which the report noted is well above long-term norms, and are up 2.3% from the start of 2026.
“As soon as this year began, prices at Manheim started moving higher as dealers anticipated strong demand from higher tax refunds to consumers,” said Jeremy Robb, chief economist at Cox Automotive.
“Sales conversion rates, a clear sign of demand, were higher against 2025 for every week but one in Q1, and vehicle value trends at auction show we are well ahead of last year and where we would normally be during a spring bounce in the wholesale markets,” Robb added.
“We thought we’d see some impact from the Middle East conflict, and that may still happen. But right now, the data is clear: used-vehicle demand is healthy and inventory levels are relatively tight,” he added.
The Manheim report found that buyer activity was strengthening and there was increased competition for the available inventory in the wholesale lanes, as the sales conversion rate rose to 68.2% in March. That’s 4.6 percentage points higher than the most recent three-year average for March and is up 5.5 percentage points from the revised-higher February rate of 62.7%.
Used electric vehicles (EVs) also showed strength in the first quarter with firm pricing and activity for the quarter as values rose alongside the seasonal increase.
It noted that used EVs offer consumers affordability advantages over new EVs, while there’s also an increasing flow of off-lease EVs entering wholesale channels.
Retail used vehicle sales also showed momentum, with first quarter sales up about 2% compared with the same level a year ago. Inventory also tightened, with the days’ supply metric declining below 40 in March, which was the lowest point this year and down from a year ago.
Cox Automotive’s outlook for 2026 sees used vehicles continuing a stronger-than-expected start to the year, before being offset by a softer second half of 2026 with total used vehicle sales declining 1% year over year.
“As we move towards summer, we expect Manheim values to hold their ground with many more consumers yet to file their tax returns this year,” Robb said.
“The end of March typically proves to be the ‘peak’ for price action at Manheim. The Middle East conflict could dampen the spirits of the U.S. consumer, but we just haven’t seen it yet – our data is showing resiliency in the economy,” Robb said.
