Sponsored by Agile Auto

 

 

Economic Update

Inflation continued to cool through June and July, reinforcing the trend that price pressures are easing across the broader economy. While that is encouraging news for consumers and businesses alike, the Federal Reserve has once again chosen to leave interest rates unchanged.

The Fed remains focused on ensuring inflation returns sustainably to its 2% target before beginning a rate-cutting cycle. Current expectations are that the first rate reduction could come as early as September if inflation and employment data continue to cooperate. Until then, borrowing costs will remain elevated, keeping pressure on vehicle affordability and monthly payments.

 

 

Automotive Market Update

Wholesale Market Remains Strong

The Manheim Used Vehicle Value Index (MUVVI) increased to 212.9, up 2.1% year over year and 0.1% month over month. While seasonal adjustments show stable pricing, wholesale values continue to demonstrate remarkable resilience despite higher interest rates.

Inventory Continues to Tighten

Dealer used vehicle inventory declined from 2.20 million vehicles (49 days supply) in January to 2.13 million vehicles (42 days supply) in February.

The biggest challenge remains affordability.

Vehicles priced below $15,000 carry only 31 days of supply, making affordable inventory one of the most competitive segments in the market.

Retail Demand Remains Healthy

Used retail sales increased from 1.38 million units in January to an estimated 1.41 million units in February, showing consumers are still actively purchasing despite elevated financing costs.

Average used vehicle listing prices also softened from $26,043 to $25,287, helping improve affordability without creating significant downward pressure on wholesale values.

Consumers Continue to Buy Affordable Vehicles

According to CarGurus, vehicles priced below $30,000 represented approximately 73% of all year over year sales growth during 2025.

Consumers continue trading down into lower priced vehicles as affordability remains the primary purchase driver.

Financing Remains a Headwind

The average used vehicle loan reached $27,528 with an average monthly payment of $537, reinforcing that payment sensitivity continues to influence buying decisions.

Certified Pre-Owned Continues Growing

Certified Pre-Owned sales increased from 2.50 million units in 2024 to 2.61 million in 2025, showing continued consumer confidence in late model used inventory.

 

 

Dealer Takeaways

1. Affordability Is Still Winning

Consumers remain highly payment driven. Inventory that delivers the right combination of price, payment, and value will continue to outperform expensive alternatives.

2. Buy the Right Inventory, Not Just More Inventory

With wholesale values remaining firm and affordable inventory becoming harder to source, acquisition discipline is more important than ever. Focus on vehicles that have proven to deliver both turn and front gross for your specific market rather than simply increasing inventory levels.

3. Affordable Inventory Is Your Competitive Advantage

Vehicles under $30,000 continue driving the majority of market growth, while inventory below $15,000 remains extremely scarce. Dealers who can consistently source these vehicles will maintain a meaningful competitive advantage.

4. Wholesale Prices Are Stable

The feared collapse in used vehicle values has not materialized. Stable wholesale pricing provides dealers with greater confidence to acquire inventory while still carefully monitoring aging units and market depreciation.

5. Operational Excellence Matters More Than Market Conditions

The strongest dealers continue outperforming because they execute better. Market conditions affect everyone equally. Inventory strategy, acquisition discipline, pricing, merchandising, and daily execution are what separate top performers from the rest.

 

 

Bottom Line

The used vehicle market continues to normalize, but it has not become easy. Supply remains constrained in the most desirable price segments, financing costs continue to pressure affordability, and consumers remain value focused. Dealers who leverage market intelligence to buy the right vehicles, maintain balanced inventory, and execute consistently will continue to outperform throughout the remainder of 2026.