Manheim Used Vehicle Value Index: February 2026 Trends

Manheim's MUVVI rose to 212.3 in February, a 4.0% year-over-year gain and 0.8% month-over-month increase, with non-adjusted wholesale prices up 4.2% YoY and 3.0% vs. January. MMR three-year prices increased 3.1% in February, retention averaged 100.3% and sales conversion strengthened to 61.5%, signaling firm dealer demand; non-EVs outperformed EVs (non-EV +3.7% YoY vs. EV +1.8% YoY). Wholesale days’ supply was 26.7 days and rental vehicle values climbed sharply (rental prices +9.1% YoY), though Cox cautions that recent Middle East developments and higher gas prices could temper near-term consumer appetite.

Analysis

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%.

Key Decisions for Investors

• Establish a 2–3% portfolio long position in rental operators: HTZ (Hertz) and CAR (Avis Budget) split 60/40, targeting a 3–6 month horizon to capture stronger resale values and seasonal travel demand; set stop loss at -15% and take profits if MUVVI outperforms YoY by >6% or rental MMRs rise another 5% within 90 days.
• Initiate a 2% long position in KMX (CarMax) with a 3–6 month call spread (buy 3–6 month ATM call, sell 10–15% OTM call) to capture higher sales conversion (61.5%) and used price tailwinds; exit if sales conversion falls below 58% or non‑EV index underperforms EV index by >200bps.
• Short 1–2% exposure to EV pure‑plays RIVN and LCID (equal weight), or buy 3–6 month puts, as EV wholesale appreciation (+1.8% YoY) lags non‑EV; cover if EV index 3‑month delta >+3% or federal/state EV incentives are reinstated within 90 days.
• Overweight financials with auto‑lending exposure (ALLY) by 1–2% relative to benchmark given improved collateral values; hedge with a 6–12 month 1% portfolio put to protect against oil shock scenario (>$10/bbl move) which historically reduces demand and reverses used prices.