Summary
Used-car prices rose in February as tax refunds reached consumers, according to Digital Dealer citing the Carfax Used Car Index. Gains were concentrated in minivans, hybrids/EVs, and luxury SUVs, while sedans and pickups softened. Digital Dealer links the rebound partly to larger federal tax refunds and typical spring-season buying.
Key takeaways
- Market warmed in February after a cooler January; momentum varies by segment and region.
- Digital Dealer attributes stronger demand to larger average refunds tied to last year’s tax changes and withholding dynamics.
- Despite February’s lift, prices remain elevated versus historical norms, per the outlet.
Segment performance (month over month)
- Vans/minivans: about +$600 (largest jump).
- Hybrids and EVs: more than +$200, reversing recent depreciation.
- Luxury SUVs: about +$300.
- Sedans/hatchbacks/wagons: just over −$100.
- Pickup trucks: more than −$75.
Regional highlights
- Mid-Atlantic: all segments up; luxury SUVs roughly +$540.
- Southeast: vans/minivans more than +$800.
- Midwest: vans/minivans nearly +$400.
- Plains: luxury cars more than +$900 (largest single-segment regional increase).
- West: hybrids/EVs more than +$600; pickup trucks nearly −$400.
- Northeast: luxury cars almost −$500.
Why prices are moving
- Digital Dealer cites larger-than-last-year refunds following a higher standard deduction in last year’s tax bill; withholding patterns may have produced bigger refunds for many filers.
- Refund-season cash often funds down payments, lifting late-winter and early-spring used-vehicle activity, per the outlet.
Implications
- Buyers: Tighter pricing and fewer bargains where gains are steep (minivans, hybrids/EVs); more negotiating room in sedans and some pickups, including on the West Coast.
- Owners trading in: Elevated prices can support trade equity, helping offset financing or transaction costs.
- Dealers: Consider segment/region-focused inventory—family haulers in the Southeast/Midwest; electrified models on the West Coast; higher-end luxury in the Plains.
Outlook
Digital Dealer frames the Carfax index as an early-season indicator. Whether the heat spreads or cools will depend on refund disbursement pace and inventory as March progresses.
