Surge in Used Car Prices: March Trends and Market Insights
In March, the prices of used cars witnessed a significant increase, attributed primarily to the tax refund season coupled with various affordability challenges. As new car prices soared alongside rising fuel costs and interest rates, consumers found themselves flocking to used car dealerships.
The Manheim Used Vehicle Value Index (MUVVI) recorded a rise to 215.3 in March, marking a substantial 6.2% increase compared to the previous year and a 1.4% rise from February. Remarkably, on an unadjusted basis, the prices surged 5.7% year-on-year and 4.2% month-over-month, well exceeding the historical average of 3.4% for March gains.
This sharp 6.2% uptick has resulted in used car prices reaching their peak in nearly three years. Furthermore, this increase is the most considerable since May 2023, when prices rose by 3.2%.
The MUVVI is a barometer for prices at wholesale auctions, which typically serve as buy-and-sell platforms for dealers and automotive professionals.
Jeremy Robb, Chief Economist at Cox Automotive, noted that as the year commenced, wholesale prices began trending upwards, influenced by an expected surge in demand due to increased tax refunds. He highlighted that sales conversion rates during the first quarter exceeded those in 2025, indicating strong demand, and suggested that current vehicle value trends are ahead of both last year’s figures and seasonal expectations typically observed in spring wholesale markets.
Cox also pointed out a tightening supply of used vehicles. By the end of March, the days’ supply at wholesale fell to 24.5 days, a decrease of 2.5 days from February. This situation is a lingering effect of the auto industry’s supply chain disruptions experienced in 2021 and 2022, which curtailed the number of new vehicles on the market. These vehicles, now completing their leasing terms, aren’t returning quickly enough to the used market.
"The data shows a healthy demand for used vehicles amidst relatively low inventory levels," Robb emphasised.
Shares of used car entities such as Carvana, CarMax, and AutoNation could potentially see an uplift in value during the upcoming spring and summer months.
In terms of market categories, luxury vehicles and midsize cars led the charge with year-over-year price increases of 5.0% and 4.1%, respectively. Conversely, compact cars experienced the least growth, at 3.2%.
Electric vehicles (EVs) stood out in March, with their index rising 7.9% compared to a year earlier and 3.7% from February. The EV segment accounted for a record 3.9% of the MUVVI indices in March, and Manheim achieved its highest quarterly volume of wholesale EV sales in the first quarter.
Robb mentioned that as petrol prices edged above $4.00 per gallon, dealers have started to stock up on used EVs. In addition, the Manufacturer’s Suggested Retail Prices (MSRPs) of new vehicles, across all powertrains, approached $50,000, furthering the affordability concerns for many Australian consumers, prompting greater interest in used vehicles.
The rising trend in used car prices illustrates the complicated interplay of market dynamics that influences consumer behaviour and purchasing decisions, especially as economic conditions shift.
