The wholesale used-vehicle market is finishing 2026 on a far weaker footing than Cox Automotive expected when the year began. The Manheim Used Vehicle Value Index fell to 205.9 in September, down 1.1% from August and 0.6% from a year ago after adjustments for mix, mileage and seasonality. On a non-adjusted basis, prices declined 1.3% from August and 1.2% year over year, with depreciation in the third quarter running steeper than seasonal norms.
Cox Automotive now expects the index to close 2026 up only 0.2% year over year. That figure is a significant step down from the 2% gain the firm was projecting in July, and it falls well below both last year’s 0.4% increase and the long-term average gain of 2.3%. The first half had actually run ahead of normal appreciation rates, which made the Q3 reversal sharper in comparison. Chief economist Jeremy Robb put it plainly: “The first half of the year actually showed more appreciation than usual, even in the face of higher fuel prices. But with the conflict in the Middle East ongoing, diesel prices at record highs, and interest rates climbing rapidly, increasingly worrying both businesses and consumers, wholesale prices have felt the sting.”
Fuel costs shaped the quarter in ways that cut differently across segments. Diesel vehicles made up just over 3% of wholesale inventory, but with diesel prices at record highs, their days’ supply climbed to 39 days, 27% above year-ago levels. Large pickups and SUVs absorbed the most pressure as demand softened. Older and more affordable vehicles fared better, depreciating less as buyers in the budget tier kept shopping. EVs moved in the opposite direction from diesel: days’ supply declined and values held as sustained high gasoline prices drove buyers toward fuel-efficient alternatives.
One unusual factor may have amplified September’s weakness. It was the first September in decades without an Atlantic hurricane, which removed the typical post-storm demand surge that normally supports wholesale prices in that month. The absence of that demand floor, layered on top of the fuel cost and rate headwinds, likely pushed September depreciation beyond what the macro environment alone would have produced.
EV volume at Manheim continues to grow regardless of the broader softness. Wholesale EV share crossed 4% for the first time in mid-July; by the third quarter it had reached a record 4.9% of all Manheim transactions, up from 3.9% in Q2. That represents a 22% sequential gain and a 45% jump from a year ago. Used retail EV sales reached approximately 124,000 units in Q3, the highest quarterly total on record and up 11.4% year over year, though EVs still account for only about 2.8% of all used retail transactions.
Off-lease supply is the structural trend underneath the EV share numbers. Monthly off-lease volume bottomed in Q1 and has since grown from roughly 190,000 units per month in the first half to about 220,000 units per month in the second half. EVs represented about 10% of that off-lease mix in the first half and are expected to reach 16% in the second half, trending toward 19% by summer 2027. Cox Automotive projects that expanding off-lease pipeline will contribute to roughly 3% wholesale volume growth in 2027.
On the retail side, Cox Automotive lifted its full-year used-vehicle sales forecast to 38.5 million units, up modestly from the prior 38.4 million estimate and essentially flat with 2025. The retail used-vehicle component sits at 20.5 million units, and the certified pre-owned forecast holds at 2.6 million, down 1.8% year over year. Total wholesale volume is projected at 11.8 million units in 2026, with a 23% increase in off-lease volume and a 5% gain in rental-fleet returns partially offset by a 3% decline in dealer units. Loan rates that hit 9.58% in June have continued climbing, which is weighing on both new and used transaction activity heading into Q4.
The contrast with earlier in the year is stark. The index sat at 212.6 in May, up 3.6% year over year, with compact cars posting double-digit non-adjusted gains. September’s 205.9 is 6.7 index points lower five months later, with no hurricane, record diesel prices, and a Fed still moving rates in one direction. Cox Automotive enters Q4 watching interest rates, consumer sentiment and Middle East energy markets. The 2026 used-vehicle story began as a mild recovery. It is ending as a test of the floor.
Source: Cox Automotive. Images courtesy of Cox Automotive.
