Remember the shockwaves of 2021, when used-car prices surged and dealers laughed all the way to the bank? The market has since cooled, and the new mood heading into 2026 is one of relative steadiness — with important caveats.
A steady year on paper
Cox Automotive’s Manheim index, the industry’s go-to wholesale gauge, is forecasting a modest 2% increase in wholesale used-vehicle prices by the end of 2026. That’s roughly in line with the long-term year-end average and a big change from the pandemic-era roller coaster (prices jumped 46.6% in 2021, then swung the other way in subsequent years).
The Manheim Used Vehicle Value Index closed 2025 at about 205.5 — up 0.4% versus December 2024 and nearly flat month to month. Cox’s interim chief economist, Jeremy Robb, points to two tailwinds for the early year: lower new and used auto loan rates (the lowest in a year) and the seasonal bump from tax refunds. Together, those could lift demand as 2026 gets underway.
That forecast of calm does not mean a boom: Cox still expects total used-vehicle sales to tick down slightly in 2026 (roughly a 0.9% fall to about 38.3 million units), including a small drop in used retail sales. Wholesale pricing tends to lead retail pricing, but historically retailers don’t always pass every wholesale move straight to consumers — retail prices have been stickier on the downside in recent years.
Not all cars are equal
Dig beneath the headline number and the market looks patchy. Different data sets and auction channels show divergent momentum across segments:
- Luxury vehicles and some late-model used EVs showed pockets of strength in certain wholesale auctions late in 2025, pushing overall indices marginally higher in December. At the same time, compact cars and full-size pickups softened in many lanes.
- Yet other sources and reports point to a clear cooling in the clean-vehicle space: used hybrids and EVs experienced pronounced price weakness at year-end. Part of that is policy-driven. Federal tax credits for new and used clean vehicles effectively ended in late 2025, and buyers who moved earlier to capture incentives pulled forward demand. With incentive-driven urgency gone and more electrified inventory coming to market, dealers have less leverage to hold prices up.
- If you’re buying: patience may pay, especially for hybrids and many EVs. With more inventory and fewer incentive-driven buyers, negotiation room has widened in places. Seasonal dips around late winter and early spring historically offer better deals than peak summer months.
- If you’re selling: lean on digital listings and accurate, timestamped condition reports. Cars that are priced and presented precisely move faster and at better net returns than those that sit.
- For both: watch finance costs and personal cash flows. If loan rates stay lower and consumers see larger tax refunds, demand could surprise to the upside.
Put simply: depending on the auction, the metric, and the vehicle cohort you watch, you’ll find winners and losers. Across the industry, though, hybrids and many EVs look likelier to be on the softer side of pricing pressure in early 2026.
Why digital tools matter more than ever
A quieter overall market will put more emphasis on efficiency and precision. Dealers, marketplaces and logistics firms are doubling down on digital toolkits that let them price, place and move inventory faster and with less guesswork. Expect wider adoption of things like 360-degree vehicle tours, automated condition reports, real-time dynamic pricing and AI models that suggest where a car will fetch its best price.
Those capabilities change the economics for everyone: sellers can target demand geographically, carriers orchestrate tighter delivery windows, and buyers see clearer, data-backed pricing. Technology that automates appointments, finance approvals and post-sale logistics is becoming table stakes — and some of the same agentic booking ideas being used elsewhere in tech are filtering into auto retailing as well (AI-driven booking and agentic tools are an obvious parallel). Advanced image and visualization tech also helps listings stand out and reduce returns — an evolution not unlike the new image-generation tools rolling out in other industries (AI imagery models are already changing how products are presented online).
What buyers and sellers should watch
The headline for 2026 may well be “normal depreciation” — a return to longer-term averages after the pandemic distortions. But underneath that equilibrium are fast-moving trends in electrification and digitization that will tilt outcomes vehicle-by-vehicle and region-by-region. If you’re in the market, the next six months will reward a bit of homework and a willingness to compare channels rather than assume every used car follows the same script.