Used Vehicle Wholesale Prices Jumped. That’s How it Started in 2020 when Broad Inflation Took Off

These new inflation pressures suddenly building up in the pipeline are concerning.

By Wolf Richter for WOLF STREET.

Prices of used vehicles sold at auctions where dealers buy to replenish their inventories spiked by 4.2% in March from February, not seasonally adjusted, to $20,102 (red in the chart). Year-over-year, prices jumped by 5.7%, the biggest increase since the price spike during the pandemic.

Seasonally adjusted, wholesale prices jumped by 1.4% in March from February, according to the Manheim Used Vehicle Value Index (MUVVI) today. Manheim, a division of Cox Automotive, is the largest auto auction house in the US.

Dealers, seeing what is happening on their lots, were emboldened to bid up prices at these auctions, confident that they can pass these higher costs, plus some, to their customers.

Supply at these auctions comes from rental fleets that sell vehicles they pulled out of service, from finance companies that sell their off-lease vehicles and repos, from corporate and government fleets, etc.

“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 said.

Price action at the auctions came amid “relatively tight supply” and “healthy” demand fueled by big tax refunds to consumers, the report said.

Tax refunds make great down-payments for used vehicles. The total amount refunded through March 27 was up by 13.6% year-over-year, according to the latest filing statistics from the IRS. The average refund rose to $3,521, up by 11.1% year-over-year.

These big tax refunds were purposefully built into the “One, Big, Beautiful Bill Act” (OBBB), signed into law in July 2025, to boost the economy before the mid-term elections.

EV prices jumped by 3.7% in March from February, seasonally adjusted, and by 8.0% year-over-year, to $28,471.

ICE vehicle prices rose by 1.8% in March from February, seasonally adjusted, and by 4.2% year-over-year, to $19,874.

“EVs showed notable strength at Manheim during the first quarter, outperforming long‑term expectations and a sign of healthy demand for used EVs,” Cox Automotive said.

“Rising gas prices may have positively influenced demand last month, as dealers pursued potential opportunities with used EV, which are notably more affordable than new EVs,” it said.

“EV availability at Manheim improved in Q1 as well, as more off-lease EVs are moved into the auction lanes. In fact, the wholesale volume of EVs at Manheim set a record in Q1, with nearly 37,000 units sold,” it said.

“Initial retail sales estimates for used EVs were strong as well. Cox Automotive’s analysis suggests more than 100,000 used EVs were sold in Q1, the second-best result behind only Q3 2025, when buyers were hurrying to secure soon-to-expire government-backed sales incentives,” it said.

Used vehicle CPI inflation lags wholesale prices by a couple of months. These auction prices are an indicator of the price pressures coming to retail inflation rates. Affordability is an issue that might make it more difficult for dealers to pass on higher prices. But consumers are armed with their big tax refunds – they’re like big stimulus checks – and those kinds of down-payments reduce the monthly payments.

When those higher prices flow through to retail prices, they will push up CPI inflation for used vehicles.

From mid-2020 through mid-2022, the Manheim Used Vehicle Value Index had spiked by over 60%. Retail CPI inflation for used vehicles followed with a lag and spiked by 55%. Then, from mid-2022 to mid-2024, prices fell substantially, giving up a portion of that price spike. These falling used-vehicle prices had been a big factor in cooling core CPI inflation. But that process bottomed out in 2024, and prices started ticking up again. So these new inflation pressures suddenly building up in the pipeline are concerning.

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