On the Dash:
- Wholesale used-vehicle prices rose faster than normal for early January, signaling strong early demand.
- Luxury vehicles outperformed the broader market, while EV values softened following changes to tax credits.
- Dealer demand remained strong, with higher sales conversion, stable supply, and improving market retention.
Wholesale used-vehicle prices climbed sharply in the first half of January, signaling stronger early-year demand as dealers prepare for the spring selling season.
The Manheim Used Vehicle Value Index rose to 209.2 in the first 15 days of January, according to Cox Automotive data from Manheim. That marks a 1.8% increase from December and a 1.7% gain year over year, despite seasonal patterns that typically show slight declines this time of year.
Non-adjusted wholesale prices increased 2.1% from December and were up 1.9% compared with January 2025. Those gains exceed the long-term January average, which usually reflects a modest monthly increase.
The early strength reflects growing dealer confidence ahead of tax refund season and improving consumer response at the retail level. While tax returns cannot be filed until late January, dealers are already acquiring inventory in anticipation of higher demand. Used retail sales showed encouraging momentum in the first two weeks of the year, even as retail prices remain elevated.
Manheim market indicators also point to stronger demand conditions. Prices for vehicles tracked by the Manheim Market Report Three-Year-Old Index rose 0.6% early in January. Retention averaged 100.2%, higher than both last year and December levels. Sales conversion reached 61.9%, rising sharply month over month and year over year.
Together, those metrics suggest depreciation remains below historical norms for this time of year, while buyer engagement at auction remains strong.
By segment, year-over-year wholesale prices increased 1.7% overall, supported primarily by continued strength in the luxury vehicle segment. SUVs and compact cars recorded the most significant declines, reflecting uneven demand across categories.
Electric vehicle values softened further. The Manheim EV Index declined 0.2% from December and rose just 0.1% year over year. Non-EV values performed more strongly, posting a 1.6% increase both month over month and year over year, following the expiration of EV tax credits.
Wholesale supply remained balanced. Used-vehicle days’ supply stood at 32 days as of Jan. 15, unchanged from late December and slightly higher than a year earlier. Supply levels have largely kept pace with sales, following steady increases in December.
