Manheim Used Vehicle Value Index: February 2026 Trends

Market structure: Wholesale used-vehicle prices are firming — MUVVI +4.0% YoY and non-adjusted +4.2% YoY with days’ supply at 26.7 vs pre‑COVID 31 — which benefits dealers, auction operators and rental lessors (better resale values, higher retention) and hurts marginal subprime borrowers and EV pure‑plays where EV Index is only +1.8% YoY vs non‑EV +3.7%. Luxury and low‑mileage rental cohorts are driving outperformance, concentrating pricing power in premium inventory and late‑cycle trade‑ins.

Risk assessment: Key tail risks are a sharp oil shock from Middle East escalation (>$10/bbl move in 30 days) that would compress retail traffic and flip prices lower, and a faster OEM ramp of off‑lease/lease returns adding supply in 2–6 months. Hidden dependencies include rental fleet replacement cadence (rental mileage down 25.2% YoY reduces near‑term supply) and tax‑refund timing (a March demand spike tied to ~10% larger refunds). Catalysts that can amplify trends: March tax refund flows, April dealer earnings, and May CPI/inflation prints.

Trade implications: Tactical long exposure to rental operators and dealer/auction franchises (HTZ, CAR, KMX) and selective bank lenders (ALLY) to capture stronger collateral values; underweight/short EV pure‑plays (RIVN/LCID) and compact‑car focused retailers. Use 3–6 month call spreads on KMX/HTZ to capture seasonal upside and pair long KMX vs short RIVN for relative value over 3–6 months. Hedge macro tail risk with 6–12 month put protection sized to 1–2% of portfolio.

Contrarian angles: The market underestimates how concentrated strength (luxury, rental) is — broader OEM benefit is overstated and EV weakness may be nearer‑term overdone; consider contrarian small long position in battered, cash‑flowing OEMs with scale (GM, F) on a 6–12 month view if EV policy incentives return. Beware mean reversion: if off‑lease volumes normalize Q3–Q4, used prices could retrace 5–10%.