The used-car market was supposed to be stabilizing. After the wild swings of the pandemic years, when prices soared to unprecedented levels and buyers competed fiercely for limited inventory, the expectation was that normalcy would gradually return. Prices would soften. Supply would rebuild. The frenzy would fade into memory. For a while, that appeared to be happening.
But recent data suggests the calm may have been temporary. Used-car prices in several major U.S. markets have shown sudden and significant weekly movement, catching dealers, analysts, and consumers off guard. The shifts vary by region and vehicle segment, but the pattern is clear: the market is moving again, and not everyone agrees on where it’s heading.
Wholesale auction prices, the benchmark that dealers use to acquire inventory, rose sharply in the final weeks of the month across markets in Texas, Florida, and the Southwest. At the same time, prices in the Northeast and Midwest showed unexpected softness, declining by margins not seen in months. The divergence has created confusion for dealers trying to price their lots and buyers trying to time their purchases.
“We went from predictable to volatile in about two weeks,” said Carmen Reyes, owner of a used-car dealership in Houston. “Prices at auction jumped, and now I’m paying more for the same vehicles I bought last month. But customers still expect the prices they saw online a week ago. That gap is hard to manage.”
The Manheim Used Vehicle Value Index, one of the most closely watched measures of wholesale prices, recorded its largest weekly increase in over a year. The index, which tracks prices at the nation’s largest auto auction company, showed a 2.3 percent rise in a single week. That may sound modest in percentage terms, but for a market that had been moving in fractions of a percent, it represents a significant acceleration.
Analysts point to several factors behind the movement. Tax refund season, which typically boosts used-car demand in the first quarter, arrived later than usual this year due to processing delays at the Internal Revenue Service. When refunds finally hit bank accounts, buyers who had been waiting moved quickly. The compressed timeline created a demand surge that caught some dealers with insufficient inventory.
“Tax season is always a factor in used-car sales,” said Jonathan Muller, chief economist at an automotive research firm. “But this year the timing was off. Demand that would normally spread over six weeks got concentrated into three. That creates pressure.”
New-car inventory levels also play a role. While production has largely recovered from the semiconductor shortages that constrained supply during the pandemic, certain popular models remain difficult to find. Buyers who cannot get the new vehicle they want, or who balk at new-car prices that remain elevated, turn to the used market instead. That substitution effect adds demand to a used-car supply that is still rebuilding.
The regional variations reflect local economic conditions and consumer preferences. Texas and Florida, both states with strong population growth and robust job markets, have seen sustained demand for vehicles. The prevalence of trucks and SUVs in these markets amplifies price movements, since those segments have tighter supply than sedans and compact cars.
In contrast, the Northeast has experienced softer demand, partly due to weather-related delays in spring buying and partly due to economic uncertainty in sectors like finance and technology that employ significant portions of the workforce. Dealers in the region report longer days-to-turn metrics, meaning vehicles are sitting on lots longer before selling.
“We’re seeing buyers hesitate,” said Michael Torres, general manager of a dealership group in New Jersey. “They’re researching more, negotiating harder, and walking away if the deal doesn’t feel right. That wasn’t happening six months ago.”
The movement in prices has implications beyond the dealership lot. Used-car values affect loan-to-value ratios, which determine how much financing buyers can obtain. When prices rise quickly, buyers may find themselves able to borrow more, which can further stimulate demand. When prices fall, buyers with existing loans may find themselves underwater, owing more than their vehicles are worth.
Lenders are watching the data closely. Subprime auto loans, which serve buyers with weaker credit, have shown rising delinquency rates in recent quarters. If used-car values decline significantly, the collateral backing those loans becomes less valuable, increasing losses for lenders in the event of default. The Federal Reserve and other regulators have flagged auto lending as an area of concern.
“The used-car market is a leading indicator for consumer credit health,” said Patricia Okonkwo, a senior analyst at a credit rating agency. “When prices are stable, the system works. When they move sharply in either direction, stress shows up in loan performance.”
I spoke with a buyer in Phoenix who had been shopping for a used SUV for several weeks. She described the experience as frustrating. “Every time I find something I like, the price changes before I can make an offer,” she said. “I don’t know if I should buy now or wait. Nobody seems to know what’s going to happen next.”
That uncertainty is shared across the market. Dealers are adjusting pricing strategies daily, using software tools that track competitor listings and auction results in real time. Some have adopted more aggressive acquisition tactics, bidding higher at auction to secure desirable inventory before prices rise further. Others are holding back, worried that paying today’s prices will leave them exposed if the market reverses.
The rental car companies that supply a significant portion of used-car inventory are also influencing the market. Hertz, Enterprise, and Avis typically sell vehicles after one to two years of service, creating a steady flow of late-model used cars. But fleet strategies have shifted. Some companies extended vehicle holding periods during the pandemic when replacements were unavailable. Now, as they rotate those older vehicles out of service, the age and mileage profile of fleet sales has changed.
“Fleet vehicles used to be the sweet spot,” said Derek Chin, a wholesale buyer based in Atlanta. “Low miles, well-maintained, reasonable prices. Now you’re seeing higher mileage and more wear. The quality mix is different, and that affects what dealers are willing to pay.”
Electric vehicles add another layer of complexity. Used EV prices have been particularly volatile, falling sharply from their pandemic peaks as new EV prices dropped and more models entered the market. Buyers considering a used Tesla or Chevrolet Bolt face a different calculation than those shopping for a used Camry or F-150. The lack of historical data on EV depreciation makes pricing more speculative.
“Nobody really knows what a three-year-old EV is worth,” said an appraiser at a regional auction house who spoke on condition of anonymity. “The technology changes fast. The tax credits change. The charging infrastructure changes. There are too many variables to price with confidence.”
The broader economic environment adds uncertainty. Interest rates remain elevated compared to the near-zero levels of the pandemic era, increasing monthly payments for buyers who finance their purchases. Inflation, while cooling, has eroded purchasing power. Consumer confidence surveys show mixed signals, with some households feeling optimistic and others pulling back on major purchases.
Dealers are caught between these crosscurrents. They need inventory to generate sales, but acquiring inventory at elevated prices risks margin compression or losses if the market softens. They need to move vehicles quickly to manage floorplan costs, but aggressive discounting signals weakness to buyers who may then wait for further reductions.
“It’s a balancing act every day,” said Reyes, the Houston dealer. “You’re making bets on where prices will be in two weeks, four weeks. Sometimes you guess right. Sometimes you don’t.”
Industry forecasters remain divided on the near-term trajectory. Some predict that the recent price increases will prove temporary, driven by seasonal factors that will fade as spring buying normalizes. Others argue that structural supply constraints, particularly for trucks and SUVs, will keep prices elevated through the summer. A few see the potential for another leg down if economic conditions weaken or if new-car incentives draw buyers away from the used market.
“The only honest answer is that we don’t know,” said Muller, the economist. “The models that worked before the pandemic don’t work as well now. The data is noisy. Anyone who claims certainty is guessing.”
For consumers, the advice from market observers is consistent but unsatisfying: buy when you need a vehicle, not when you think the market will be optimal. Timing the used-car market has always been difficult, and the current volatility makes it more so. Waiting for the perfect moment may mean waiting indefinitely.
The used-car market remains essential to American mobility. Roughly 40 million used vehicles change hands each year, far exceeding new-car sales. For buyers who cannot afford new-car prices, or who prefer the value proposition of a lightly used model, the used market is the only realistic option. That importance makes the current uncertainty more than an academic concern.
The prices that flash on dealer websites and auction screens represent real decisions for real families. A few hundred dollars in either direction determines whether a purchase fits a budget or falls outside it. The weekly movements now rippling through key markets will shape those decisions for months to come.
The market will find its footing eventually. It always does. But the path from here to stability remains unclear, and the buyers and sellers navigating that path are discovering that the used-car market has not yet finished surprising them. The numbers on the screen keep moving, and nobody is quite sure when they will stop.
