Used car prices fall for the first time this year and EV interest rises as gas prices spike

Used car prices in the United States declined in April for the first time since October, as rising gas prices amid the ongoing conflict in the Middle East put pressure on consumer budgets. Cox Automotive reported that its Manheim Used Vehicle Value Index fell 1.6% from March but remained 1.8% higher than a year earlier. The increase in fuel costs, which reached a national average of $4.30 per gallon at the end of April and have since climbed to $4.56, is driving buyers to seek more affordable options, including older vehicles and electric vehicles (EVs). The surge in gas prices, up 47% since late February, is absorbing much of consumers’ disposable income, limiting their ability to pay premium prices for used cars. Cox Automotive’s chief economist Jeremy Robb noted that energy costs are unlikely to ease soon, which could continue to influence vehicle purchasing behavior. Despite the wholesale price drop, retail prices are expected to rise modestly by about 2% this year, with the average listed price for a used vehicle at $25,390 in March, slightly higher than the previous month. Interest in electric vehicles is growing as consumers seek to mitigate fuel expenses. Manheim’s electric vehicle index increased 7.2% year over year and 1.4% from March, reflecting a rebound in EV demand following a slowdown after federal incentives expired last year. Although used EVs remain significantly more expensive than the overall used car market—averaging over $9,200 more—rising gas prices are encouraging more buyers to consider electric options. The April price decline comes after a strong start to the spring selling season, which typically sees increased vehicle sales. The evolving dynamics of fuel costs and vehicle affordability are reshaping consumer preferences, with potential long-term impacts on the used car market and the adoption of electric vehicles.