Used-vehicle wholesale prices rose 3.6 percent year-over-year in May, according to the Manheim Used Vehicle Value Index, but the month-over-month gain of 0.3 percent was the weakest reading since the beginning of the year and well below the long-term May average of 0.9 percent. The spring bounce is over.
The May index reading of 212.6 reflects adjusted wholesale prices that account for mix, mileage, and seasonality. Non-adjusted prices, the raw auction transactions, were up 3.1 percent year-over-year but fell 1.2 percent from April. The long-term average for May is a 0.3 percent decline, which means the market softened more than usual as it moved into summer.
Jeremy Robb, chief economist at Cox Automotive, attributed the normalization to seasonal patterns and persistent fuel costs. Gas prices remain 38 percent higher than May 2025, holding above $4.50 through early May and into the summer driving season. That price differential is reshaping demand at the wholesale level, with dealers bidding up electric vehicles faster than internal-combustion models.
Electric vehicle prices jumped 11.9 percent year-over-year and gained 3.5 percent in May alone. Non-EV prices were up 3 percent year-over-year but flat from April. The EV surge comes even as EV mix at Manheim holds steady and off-lease EV supply continues to rise, a counterintuitive result that suggests dealer confidence in retail EV demand remains strong despite broader affordability concerns.
Affordability is the other story underneath the May numbers. Compact cars posted the strongest gains of any segment since December, up 12.3 percent in non-adjusted values. Older vehicles appreciated faster than newer ones this year, a trend Robb has flagged in prior monthly reports as a marker of consumer price sensitivity. SUVs, meanwhile, were the weakest major segment in May and continue to lag the overall market.
The demand side showed mixed signals. Sales conversion at Manheim auctions was 59.9 percent for the period, four percentage points higher than the three-year May average but down three percentage points from April. MMR retention, a measure of how closely actual sale prices track Manheim Market Report estimates, averaged 99.5 percent in May, up 0.4 percentage points year-over-year but down 0.2 percentage points from April. MMR prices for the three-year-old index fell 1.3 percent, a typical seasonal move.
Wholesale supply reached 26 days at the end of May, up one day from both April and May 2025. The year-over-year comparison reflects tighter supply in May 2025, when tariff-induced retail demand was still pulling inventory through the system. Current supply levels are elevated relative to last year but remain within seasonal norms, according to Robb.
Rental vehicle prices, a segment-specific measure that tracks fleet disposal, were up 2.4 percent year-over-year but fell 1.6 percent in May. Non-adjusted rental values were 1.7 percent above 2025 levels but dropped 2.7 percent month-over-month, with average mileage down 15.1 percent year-over-year as rental fleets cycled vehicles earlier in their service life.
The pattern that emerges from the May data is a market normalizing after a strong first quarter, with depreciation resuming in earnest and month-over-month gains fading. Robb projects potential volatility in the second half as off-lease supply ramps up, putting pressure on segments that saw the strongest appreciation earlier in the year. For now, the market is balanced. Whether it stays that way depends on how much inventory comes back and how long gas stays expensive.
Source: Cox Automotive. Images courtesy of Cox Automotive.
