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Welcome to the Market Pulse—your no-fluff cheatsheet to auto retail, built to help dealers price right, stock smart, and stay ahead.
The Manheim Used Vehicle Value Index stayed mostly flat MoM in August, but increased 1.7% from a year ago: Indicating that the cars dealers are buying at auction are losing value more slowly than historical norms.
From July to August, the value of 3-year-old cars didn’t drop at all: Demand for these cars is so strong (and supply so weak) that buyers are willing to pay the higher prices which keep values stable.
Used EVs are posting the strongest value gains of any segment (up 0.8% MoM and 4.6% YoY): With federal EV incentives set to expire, a rush of increased demand has made used EVs more valuable (for now).
(Source: Manheim)
Wholesale values are holding stubbornly high as dealers sell used cars faster than they can be restocked.
The Manheim Used Vehicle Value Index was pretty much unchanged from July to May, however non-seasonally adjusted values appreciated more than expected (+1% MoM and +1.8% YoY).
Via Manheim
The primary reasons:
High demand for affordable used cars and rising new car prices.
Which, (combined with pandemic production shortfalls) is further shrinking supply of used cars on dealership lots.
Leading to heavy reliance on wholesale auctions, and strong daily sales conversion rate.
Altogether, it makes sense…
Used cars outsell new ones 2:1. But until lease returns gain their former strength (likely in early 2026), the supply of late model used cars will be tougher for dealers to capture.
NOTE TO DEALERS:
Think of it this way, almost ever car bought is turning faster, but also costing more to replace. That’s a dangerous mix if inventory velocity isn’t managed tightly.
Which means reconditioning/merchandising speed matters more than ever. Holding costs often run $45–$100 per car, per day. Multiply that by the average 7 days it takes to get these cars "retail ready" and it's clear how much dealers are leaving on the table.
Used EV values are (still) appreciating faster than any other segment as federal tax credits gear up to expire.
Used EVs are reporting the strongest wholesale price gains—up 0.8% MoM and 4.6% YoY.
Via Manheim
Most used EVs at auction still come from lease returns and rental fleets, but affordability and subsidies are creating upward demand (sales are up 23% MoM and up 40% YoY).
The problem: Federal EV tax credits (up to $4,000 for used EVs) are spiking demand in the short-term before likely cooling off meaningfully.
Regardless, in 2026, EV lease returns are expected to surge 230%, according to J.D. Power.
So, while some dealers are treating EVs as fast-turn, subsidy-driven inventory today, they’re also building processes (dedicated EV sales staff, lender relationships, charging infrastructure, etc.) to handle the tidal wave of volume later.
WHY IT MATTERS:
EVs are moving differently than the rest of the wholesale market, creating a narrow, short-term profit window. Dealers need to capture gross quickly while credits drive buyers in before the vehicle becomes a liability.
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While wholesale auctions can provide a good stopgap when dealers are low on inventory, more and more operators are telling me it’s still not enough to reconcile supply with demand.
So, they’re taking some creative approaches to source high quality used cars…
Do: Incentivize every employee to be a used car inventory scout.
Alex Casebeer, GM and Partner of Capitol Auto Group pulls in 100 to 120 extra used cars a month by involving his entire team in the acquisition process.
“We spiff, our whole staff—from 600 bucks…if they give us a lead that ends in the purchase of a car. So literally I would tell people at meetings you just see a “for sale” sign on a car, take a picture of it, send it to the buying team, and if they buy it, you're getting 600 bucks,” he said.
Alex Casebeer
The economics of the strategy are a lot less expensive than auction fees and the transportation costs often associated with securing a used vehicle.
Do: Look beyond traditional wholesale values to increase conversions.
Easterns Automotive uses CarMax's online appraisal tool as a pricing guide. When a customer brings in a trade, they check what CarMax would pay for that same car.
"We've fully embraced Max Offer as, effectively, a book value," said president Joel Bassam said.
Joel Bassam
If CarMax's offer is higher than what Easterns wants to pay, the group can either top it or step aside without the guessing game and wasted time. And while the approach isn’t unique in concept, the intensity of its use in 2025 is amplified by more competition.
Don’t: Chase “perfect” cars.
At Classic OKC, dealer principal Dorian Jimenez isn’t worried about having the cleanest used car inventory. He’s focused on getting more margin out of the supply he already has.
“We had to change our mindset," he said "When you look at what's called a wholesale car, somebody's going to buy it. And, you know, in today's world, people are keeping their cars longer. You're seeing individuals that have a car 12 years, 14 years. 100,000 miles is what I call the norm.”
Dorian Jimenez
And considering 50% of consumers want to pay <$15,000 for their next used car (per Edmunds), dealers willing to retail higher-mileage units at the right price point are meeting demand that’s being ignored by competitors.
Wholesale values and conversion rates are high, but so are acquisition prices and holding costs.
Meaning, the winners here won't be the ones paying premium wholesale prices against competitors with deep pockets.
Instead, smart operators are building highly diversified acquisition pipelines now.
Because every creative sourcing channel dealers create today, scales when the market (eventually) normalizes.
What are you top methods for sourcing used cars in today’s market? Hit Reply to this email and let me know.
Missed yesterday’s episode of Daily Dealer Live?
Presented by:
Cain on dealer F&I mistakes, Kelly on AI training for deal desk
Featured guests:
Marion Cain, Founder of ACE
David Kelly, Training Director of Brown & Brown Dealer Services
