When Will Used Car Prices Drop in 2026? | Used Car Prices Dropping

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As 2025 winds down, will used car prices come down in 2026? With new-vehicle prices remaining elevated, used-vehicle inventories expanding, and buyer behavior shifting, the answer isn’t as simple as “yes” or “no.” The latest data suggests the auto market is moving toward stability rather than sharp price declines, creating both challenges and opportunities for dealers.

Used Car Prices in 2025

Used-vehicle prices have stayed historically high over the past several years. According to a used car report from Q3 2025, the average transaction price for three-year-old vehicles exceeded $31,000, representing a mid-single-digit year-over-year increase.¹ While pricing remains elevated, vehicles are beginning to take longer to sell, a sign that demand is cooling slightly even as values remain strong.

Inventory levels support that narrative. Recent industry inventory reports show that used-vehicle supply reached one of its highest points of 2025, with average used listing prices hovering around $25,700 late in the year². Buyers now have more options than they did earlier in the cycle, but not enough to drive broad-based price declines.

Meanwhile, the new-vehicle market continues to influence used pricing. Industry pricing data indicates that the average new-vehicle transaction price flirted with $50,000, reinforcing affordability challenges for many consumers³. As long as new vehicles remain expensive, used vehicles will continue to benefit from sustained demand.

Why Used Car Prices Are Unlikely to Drop in 2026

New-Car Prices Are Still Propping Up Used Car Demand

High new-car prices have lasting ripple effects. When shoppers are priced out of new vehicles, they often turn to used inventory. With average new-vehicle transaction prices still near record highs, this dynamic is expected to continue into 2026, helping support used-car values even as inventory grows³.

Used Car Inventory Growth Is Creating Balance

While used car inventory levels are higher than earlier in the year, the market has not tipped into oversupply. Industry analysts note that longer days-to-turn reflect greater buyer selectivity rather than collapsing demand⁴. Shoppers are taking more time, comparing options, and negotiating harder, all signs of a normalizing market rather than a downturn.

Economic Pressures Encourage Caution

Broader economic factors, including interest rates, and unemployment rate numbers, continue to influence buyer behavior. These pressures may slow decision-making, but they also reinforce the role of used vehicles as a more attainable alternative to new cars. Rather than eliminating demand, these conditions shift buyers toward value-focused segments.

What to Expect for Used Car Prices in 2026

Used car pricing in 2026 is expected to stabilize with less volatility, increased segment-level differences, added off-lease supply, and growing opportunity in fast-turning used EVs.

Slower Price Growth and Reduced Volatility

Looking ahead, industry trend forecasts suggest that 2026 will likely bring less volatility across the automotive market, including used vehicles⁴. Instead of large price swings, dealers should expect flatter year-over-year pricing trends. This type of environment rewards disciplined acquisition strategies and strong inventory management.

Increased Importance of Segment-Level Performance

Not all vehicles will behave the same in 2026. Industry inventory data shows that price-conscious buyers remain selective, particularly in higher-priced used segments². Vehicles that offer strong reliability, reasonable mileage, and lower ownership costs are likely to outperform, while others may require more aggressive pricing to move.

The Off-Lease Inventory Rebound

After years of tight supply, off-lease vehicles are expected to return in 2026 as leases from 2023 cycle back into the market. This added near-new inventory could introduce modest price softening through increased consumer choice⁴.

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EVs: High Risk, High Reward‍

Used EVs are depreciating fast but turning quickly, creating a high-risk, high-reward opportunity for dealers. With off-lease EV supply set to surge in 2026, accurate valuation will be key to winning value-driven shoppers⁴.

Grow Your Dealership With ACV Auctions in 2026

As used car prices move toward stability in 2026, success will come down to buying smarter, and protecting margins. With buyers more selective and inventory decisions carrying more weight, dealers need confidence in every acquisition.

ACV Auctions helps dealers source the right used vehicles nationwide with detailed, data-backed condition reports that eliminate surprises. Our team of full time vehicle inspectors provide all the details of every car from paint meter readings, engine sound, OBDII codes and more. Source more inventory in 2026 by registering with ACV Auctions.