Used Car Prices Drop for First Time This Year as Gas Costs Surge

CNBC reported Thursday that used car wholesale prices declined last month for the first time since October. The drop coincides with a sharp run-up in fuel costs tied to the ongoing conflict in Iran.

Wholesale Prices Pull Back After Strong Spring

Cox Automotive’s Manheim Used Vehicle Value Index, which tracks prices at U.S. wholesale auctions, fell 1.6% in April versus March. The index was still 1.8% above its level from April 2025. Cox attributed the monthly decline partly to a normalisation following a robust spring buying season. Many shoppers had used larger-than-expected tax refunds to purchase or finance used vehicles earlier this year.

The average listed retail price of a used vehicle stood at roughly $25,390 as of March, a gain of about $100 from February. Cox forecasts wholesale price movement to track at a historically stable pace of around 2% for the full year.

Gas Prices Soaking Up Consumer Spending Power

Fuel costs are emerging as a central pressure point for household budgets. The national average gasoline price reached $4.30 a gallon by late April, up $1.12 versus the same period last year, according to AAA data. That figure has climbed further since, hitting $4.56 as of Thursday.

Cox Automotive chief economist Jeremy Robb told CNBC the Middle East conflict has now persisted for two months. He noted that while energy prices briefly retreated in mid-April, they have since accelerated. Gas prices are now up roughly 47% from the end of February. Robb said those elevated costs are absorbing discretionary income with no clear resolution on the horizon.

Background: EV Incentives Ended, But Demand Is Recovering

The electric vehicle segment had slowed meaningfully after the Trump administration eliminated federal purchase incentives late last year. That pullback now appears to be reversing. Rising fuel prices have renewed buyer interest in all-electric options at Manheim auctions. The Manheim EV-specific index climbed 7.2% year over year in April and rose 1.4% from March alone.

The average listed price for a used EV remains more than $9,200 above the broader used-car market average. Despite that premium, Cox noted affordability concerns are pushing shoppers toward both older conventional vehicles and electric alternatives as gas bills mount.

Outlook Tied to Geopolitics and Fuel Trajectory

Retail used car prices typically follow wholesale trends with a lag. If wholesale values stabilise or slide further, retail relief could follow by midsummer. But with no diplomatic resolution in sight in the Middle East, energy prices remain the key wildcard for auto demand in the months ahead.

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