Used Car Prices Hit $27,235, Highest Since 2022, as Supply Grows

A record that doesn't fit the usual pattern

Used-car shoppers can usually expect prices to ease when dealers have more cars to sell. In September they did not. Cox Automotive reports that the average used-vehicle listing price reached $27,235. That is the highest monthly average since December 2022 and close to 6% above a year earlier.5 Dealer inventory grew at the same time, with supply ending the month at 49 days, five days more than in August.5

The headline number hides an uneven market. Dealers had only a 34-day supply of vehicles listed at $15,000 or less, 15 days below the industry average.5 Sales of certified pre-owned vehicles, which carry a warranty and sit higher on the price ladder, rose 10% from a year earlier even though they fell 6% from August.5 Our reading is that the market is not overheating. Buyers are being pushed upward. Cheap cars are scarce, so the vehicles that actually sell cost more, and that lifts the average.

Kelley Blue Book describes used prices as back near their pandemic-era highs.32 That is fair for retail listings. It goes too far for dealer auctions. The Manheim Used Vehicle Value Index, which tracks what dealers pay at auction, peaked near 260 around the start of 2022 and has stayed close to 206 for most of the past two years.2

Wholesale and retail tell different stories

The biggest gap in the coverage is between auction prices and showroom prices. In September the Manheim index fell 1.1% from August to 205.9. It was 0.6% below a year earlier, the first annual decline since early 2025.46 Black Book's retention index, which measures two- to six-year-old vehicles against their original sticker price, fell further: 3.1% in the month and 3.3% from a year earlier.6 Cox's chief economist, Jeremy Robb, said depreciation at the end of September was steeper than usual for the season.6 Black Book now expects the Manheim index to end 2026 only 0.2% above last year, down from the 2% gain it forecast in July.4

One caveat cuts against the idea of a steady slide. Mid-October data showed the Manheim index recovering 0.7% to 207.4, which puts it 2.2% above a year ago.1 Cox's Jonathan Gregory said tighter supply, not stronger demand, explains the firmer prices. Wholesale supply fell to 28.2 days.1

Why does this matter for shoppers? Retail prices usually follow auction prices with a lag of a few weeks to a month.2 A soft September at auction could take some pressure off showroom prices in November. The October rebound suggests any relief will be small. In our view, used prices are flattening at a high level rather than falling.

Gas prices are splitting the market

Fuel costs are a big part of the story. Regular gasoline averaged about $4.48 a gallon in late September, roughly $1.31 more than a year earlier.3 AAA says that was the highest ever for that time of year.9 At auction, used EV values rose 2.3% from a year earlier in the first half of September, while non-EV values fell 1.3%.3 By mid-October, compact car prices were up 5.6% from a year ago, midsize cars had turned positive, and pickup values were still weak.1

The split shows that the average used-car price no longer describes what most people pay. A buyer looking for an efficient compact car is in a tighter, pricier market than someone trading in a large truck. Trade-in values will differ in the same way.

New cars: close to a record, with fewer discounts

New vehicles look much the same. The average new-car transaction price in September was $50,562, just $52 below the record set in December 2025.31 It was the fourth monthly increase in a row, but only 0.7% higher than a year earlier.35 A 2% to 4% annual rise is typical for September.33

That slow growth reflects what buyers are choosing, not cheaper cars. Cox's Erin Keating said affordability pressure is pushing buyers toward lower-priced vehicles, which holds down the industry average even as individual models get more expensive.35 Four of the five best-selling segments rose faster than the overall average. Compact cars were up 3.2% to $27,977.31 The cheapest new compact cars now cost about the same as the average used listing, which helps explain why used demand stays firm.

Discounts are also shrinking. Incentives averaged 6.6% of the transaction price in September, or about $3,359 per vehicle, down from 7.3% a year earlier.33 In August the figure was 6.5%, compared with 7.2% the year before.36 Kelley Blue Book notes that even brands with plenty of unsold stock are holding back on deals. Shoppers may find better offers on leftover 2026 models as 2027 models arrive.31 Total new-car inventory rose 4.5% to 2.8 million units.31 That gives automakers room to discount if they choose to, but so far they have not.

Auto loans: easier to get, but still costly

Financing makes these prices harder to manage. Experian put average loan rates in the second quarter at 6.35% for new cars and 11.19% for used cars.47 Edmunds reported August averages of 7% for new and 10.6% for used. Cox's market snapshot shows higher figures of 10.17% and 14.43%.47 Bankrate's mid-October survey had a 60-month new-car loan at 7.14%.43

Rates depend heavily on credit. Experian's data shows super-prime borrowers paying 4.41% on new cars and 6.29% on used. Deep-subprime borrowers pay 16.11% and 21.62%.41 Buyers with weaker credit are the ones most likely to need cars under $15,000, which are the hardest to find, so they get hit twice.

Kelley Blue Book says new-car loans have not been this easy to qualify for since April 2015.32 Coverage of the September used market also pointed to the Federal Reserve's first rate increase since 2023.3 Our view is that loans are easier to get but no cheaper, and an additional Fed hike would make used cars harder to afford.

Insurance costs have leveled off, though higher than before

Insurance is the one cost that has mostly stopped climbing fast, though the coverage disagrees on how much. NerdWallet found the median full-coverage premium rose 32.3% between January 2023 and January 2026, from $1,784 to $2,359. Only 2.6% of that increase came in the most recent year.11 From January 2025 through mid-August 2026, the median rate change insurers asked regulators for was 0%.11

Insurify reports a slight upturn: average full-coverage costs rose 1% in the first half of 2026 to $2,237, after falling 6% in 2025.15 It expects 32 states to end the year with increases, led by Connecticut.16 The Zebra puts the average annual premium at $2,256, up 3%.14 Some analysts warn that tariffs on imported parts could push this year's national increase as high as 4%.19 The sources agree that the steep increases have ended. Drivers are still paying about a third more than they did three years ago.

EVs a year after the federal tax credit ended

The federal clean-vehicle credit, up to $7,500 for new EVs and $4,000 for used ones, ended on September 30, 2025.21 EV share of new-car sales jumped to 11.4% that month as buyers rushed to qualify. It has held between 5% and 6% through 2026.26 Some analysts read this as demand returning to its pre-subsidy level rather than collapsing.29

Prices have changed too. The average new EV sold for $55,879 in September, 3% less than a year earlier.33 EV incentives fell to 11% of the transaction price, the lowest level this year and down from 14.2% a year ago.35 The price premium over gas vehicles has narrowed to about 11%, compared with roughly 18% in 2025.35

State programs now cover only part of the country. California's MyFirstEV program gives first-time buyers $3,500 off a qualifying new EV or $1,750 off a used one.24 Colorado offers income-qualified residents who trade in an older car up to $9,000 toward a new EV or $6,000 toward a used one.22 Brookings counted about 20 states with some kind of rebate in June, and some of those programs have since closed or run out of money.22

The takeaway

Taken together, the September data shows high prices that have stopped rising quickly, not a market about to get cheaper. Used-car listings are at a post-2022 high, new-car prices are close to a record, discounts are shrinking, and loan rates are holding steady or edging up. Insurance is the only major cost that has clearly slowed. More used inventory and soft auction prices may hold down increases through the end of the year. They will not fix the shortage of cheap cars. That shortage traces back to low vehicle production and leasing during the 2020–2023 chip shortage, and it will take years to work through.8