Used vehicle wholesale prices jumped significantly in March, a development that echoes the early stages of broad inflation in 2020 and is now raising concerns among financial analysts. Prices of used vehicles sold at dealer auctions spiked by 4.2% in March from February, not seasonally adjusted, reaching $20,102. This represents a substantial 5.7% year-over-year increase, marking the largest jump since the pandemic-induced price surge.
Seasonally adjusted, the Manheim Used Vehicle Value Index (MUVVI) reported a 1.4% increase in wholesale prices from February to March. Manheim, a division of Cox Automotive and the largest auto auction house in the US, provides critical insights into these market dynamics. Dealers, observing robust activity on their lots, have been emboldened to bid up prices at these auctions, confident in their ability to pass these increased costs, plus a margin, onto consumers.
“Demand signals continue to be strong at Manheim, with sales conversion reaching 68.2% in the most recent measure. That result was 4.6 percentage points higher than the most recent three‑year average for March and higher by 5.5 percentage points from the revised-higher February rate (62.7%), pointing to strengthening buyer activity and continued competition for available inventory in the wholesale lanes,” Cox Automotive stated.
Drivers Behind the Wholesale Price Surge
The surge in auction prices occurred amid “relatively tight supply” and “healthy” demand, significantly bolstered by substantial tax refunds reaching consumers. These refunds are proving to be excellent down payments for used vehicles. According to the latest IRS filing statistics, the total amount refunded through March 27 was up by 13.6% year-over-year, with the average refund climbing to $3,521, an 11.1% increase from the previous year. These generous tax refunds were intentionally integrated into the “One, Big, Beautiful Bill Act” (OBBB), signed into law in July 2025, specifically to stimulate the economy ahead of the mid-term elections.
Both electric vehicles (EVs) and internal combustion engine (ICE) vehicles saw notable price increases. EV prices surged by 3.7% in March from February, seasonally adjusted, and by 8.0% year-over-year, reaching an average of $28,471. ICE vehicle prices also rose by 1.8% in March, seasonally adjusted, and by 4.2% year-over-year, to $19,874.
Cox Automotive highlighted the strength of the EV market: “EVs showed notable strength at Manheim during the first quarter, outperforming long‑term expectations and a sign of healthy demand for used EVs.” The report also suggested that rising gasoline prices might have positively influenced demand for used EVs, which are considerably more affordable than new models. The availability of EVs at Manheim also improved in Q1, with a record nearly 37,000 units sold, driven by more off-lease EVs entering the auction lanes. Initial retail sales estimates for used EVs were robust, with Cox Automotive’s analysis suggesting over 100,000 used EVs sold in Q1.
Used Vehicle Wholesale Prices Jumped: What it Means for Inflation
The impact of these wholesale price movements on broader inflation, particularly the Consumer Price Index (CPI) for used vehicles, typically lags by a couple of months. These auction prices serve as a crucial forward indicator of the inflationary pressures expected to hit retail inflation rates. While affordability remains a potential challenge for dealers in passing on higher prices, the influx of large tax refunds acts as a significant stimulant, effectively functioning as substantial stimulus checks that reduce the burden of monthly payments for consumers.
When these higher wholesale prices inevitably translate into elevated retail prices, they will exert upward pressure on CPI inflation for used vehicles. From mid-2020 through mid-2022, the Manheim Used Vehicle Value Index surged by over 60%, with retail CPI inflation for used vehicles following suit, spiking by 55%. Following a period of substantial decline from mid-2022 to mid-2024, which helped cool core CPI inflation, prices bottomed out in 2024 and have now begun ticking up again. These new inflation pressures, particularly as used vehicle wholesale prices jumped, are a significant concern, signalling potential broader inflationary trends.
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The current rise in wholesale used vehicle prices, fueled by strong demand and significant consumer liquidity from tax refunds, presents a challenging outlook for inflation. As these costs filter down to retail, consumers should anticipate higher prices for used vehicles, potentially impacting overall economic stability.
