CENTREVILLE, Va. — Used vehicle prices rose 3.1% in May, extending an upward trend that has developed throughout 2026 as tight inventories and resilient consumer demand continue to support the market, according to CARFAX.
The company said its CARFAX Used Car Index showed prices increased across both the wholesale and retail markets as dealers competed aggressively for limited inventory while consumers sought less expensive alternatives to new vehicles.
CARFAX said the latest data suggests the used vehicle market may be entering another period of price pressure after several years of volatility following the pandemic. Although prices have retreated from the record highs reached during the supply chain disruptions of 2021 and 2022, they remain elevated compared with historical norms.
Strong Wholesale Demand
The company cited wholesale market data from Cox Automotive showing its Manheim Used Vehicle Value Index was 3.8% higher in mid-May than a year earlier, reflecting continued strong wholesale demand and limited vehicle supply.
According to CARFAX, one of the primary factors supporting higher prices is a shortage of available inventory. Industry analysts attribute the constrained supply to fewer off-lease vehicles returning to the market, fewer trade-ins resulting from slower new vehicle sales and consumers keeping their vehicles longer because of affordability concerns.
The tighter supply has intensified competition among dealers, who are paying more at wholesale auctions to replenish inventory. CARFAX noted Cox Automotive reported wholesale used vehicle prices reached their highest levels in nearly three years earlier this spring.
Strong Consumer Demand
Consumer demand also has remained stronger than many analysts anticipated, CARFAX said, as new vehicle transaction prices continue to exceed $50,000 on average, prompting many buyers to consider used vehicles despite recent price increases.
The company added that stronger-than-expected tax refunds helped support demand during the spring selling season. CARFAX cited Cox Automotive Chief Economist Jeremy Robb, who said larger refunds gave consumers additional purchasing power and helped keep wholesale demand elevated while limiting the seasonal depreciation typically seen in used vehicles.
View Through the Windshield
Looking ahead, CARFAX said used vehicle inventories are healthier than during the height of the pandemic shortages but remain constrained enough that prices are expected to stay firm through the remainder of the year. The company said late-model vehicles, pickup trucks, SUVs and other popular models continue to command premium prices, and buyers who find a well-maintained vehicle that meets their needs should be prepared to act quickly because inventory turnover remains brisk in many markets.
