Used Car Values to Edge Higher in 2026 as Used EV Prices Fall: Report

Cox Automotive forecasts a 2 percent rise in used car values by year end, signaling a return to normal depreciation.

Used cars are offered for sale at a dealership in Chicago on July 11, 2023. Scott Olson/Getty Images

Sales of used cars are projected to hit 20.3 million vehicles in 2026—a 0.7 percent dip from 2025 sales—as used vehicle inventory remains constrained due to decreased automobile production and fewer leased vehicles being returned to dealerships, automotive data analytics firm Cox Automotive said on Jan. 8.

Used car values, as measured by the Manheim Used Vehicle Value Index, should tick up 2 percent by the end of 2026, signaling a return to standard depreciation rates. The index is a companion to Cox’s Manheim Market Report, which is used to determine prices for about 99 percent of used vehicle listings.

The index finished 2025 with a slight 0.4 percent year-over-year increase from December 2024. Sales data are derived from used vehicle prices at Manheim wholesale auctions.

Jeremy Robb, Cox Automotive interim chief economist, said consumer spending on used vehicles typically slows in December, leading to stability with depreciation rates.

“Affordability concerns caused many to pull back on the spending reins,” Robb said in a statement. “As we moved into the holiday period, we saw seasonal patterns in used retail sales slowing down, while new retail sales increased against November trends but remained lower compared to 2024.”

New retail vehicle sales trended higher at the start of December, but ended the month down by 5 percent year over year, Robb said in Cox’s fourth-quarter Manhein Used Vehicle Index conference call. Total new vehicle inventory declined in December to 2.97 million units, down by 8 percent, or 260,000 vehicles, compared to earlier figures.

Used market inventory, meanwhile, rose slightly in December and finished the year at 51.3 days supply—about 5 percent higher than last year but still well below historical averages, Robb said.

The landscape for used electric vehicles (EVs) is expected to undergo a significant shift in 2026, noted Jonathan Gregory, Cox Automotive’s senior manager of economic and industry insights. With the late September 2025 expiration of a federal tax credit on new EVs, more used EVs will begin flowing into the used car supply chain, Gregory said.

“They are more diverse by brand, model and price point, and that should create more opportunities for consumers looking at used EVs, particularly as we move through the first half of the year,” he said.

While used EV sales reached 83,400 units in the fourth quarter, a 13-percent year-over-year increase, they were down 25 percent from their peak in the third quarter, Robb said. New EV sales also spiked in the third quarter ahead of the tax credit expiration, but plummeted in October and November.

The lack of appetite for electric vehicles from consumers led to Ford Motor Company announcing in mid December that it would take a $19.5 billion writedown and would discontinue making certain models of EVs.

Depreciation on used electric vehicles will also play a large factor in 2026 sales, Robb added. One-year-old EVs have an average annual decline of 18 percent in value, while two-year-old EVs are down 17.2 percent, which is significantly higher than vehicles with internal combustion engines.

However, with new and used auto loan rates trending lower to start the year, more consumers are expected to make vehicle purchases, especially for hybrid vehicles.

“As this plays out, we are expecting to see stronger demand in the auto market as the year gets underway,” Robb said.