The used-car market is undergoing significant changes as rising fuel costs reshape pricing trends ahead of 2027, with economists identifying energy prices as the primary source of uncertainty. The Manheim Used Vehicle Value Index, a key measure of wholesale used-car pricing, dropped to 205.9 in September, representing a 0.6% decline compared to the same month in the previous year. This development marks the first annual decrease in 2026 and only the second in nearly two years, according to Cox Automotive economists.
This change aligns with shifting consumer behavior. When fuel prices increase, demand for less efficient vehicles diminishes, while buyers increasingly favor models with better fuel efficiency. On October 7, the national average for regular gasoline reached $4.36 per gallon, a rise of nearly 40% from the same period last year, while diesel prices hit a record $6.52 per gallon in late September. These increases affect more than just driving expenses; diesel also powers freight transport and home heating, particularly in the Northeast, where some households may face heating oil bills rising by $1,000 or more.
Higher fuel costs are steering buyers toward more efficient used vehicles. Since January, non-electric models achieving 40-plus miles per gallon have seen their wholesale values increase by 9.9% year-to-date, while those with 35 to 39 miles per gallon have risen by 3.7%. In contrast, vehicles with under 15 miles per gallon have lost 15% of their value, and those with 15 to 19 miles per gallon are down 8.8%. The decline in lower-mileage vehicles, primarily full-size pickups and large SUVs, has contributed to the overall drop in the index.
Values and demand strengthen for fuel-efficient models. High gas prices are a driver for the recent decline in the index overall, mainly leading to price declines for used trucks and SUVs, but high gas prices also increase demand for more fuel-efficient vehicles, Cox Automotive said. “Hybrids and other high-mileage vehicles are gaining value while the rest of the market depreciates,” Gregory said.
Economists suggest that any reduction in gas prices could stabilize demand and support used-car values. However, sustained high costs may continue to weaken consumer confidence, particularly in areas where diesel is essential for transportation and heating. The connection between energy prices and vehicle demand remains a defining factor as the market moves into 2027.