On the surface, the wholesale used vehicle market appeared to hit a rare moment of stability in August. The Manheim Used Vehicle Value Index (MUVVI), the gold standard for wholesale prices, was perfectly flat for the month, a deceptive calm in a market that has been defined by volatility.
However, this stability in the used market conceals a much more dramatic story unfolding on the new vehicle side. A deep dive into the full Manheim report reveals a critical detail that connects the two halves of the industry: a massive, nearly 30% surge in sales to rental car companies is artificially inflating the new car market’s headline numbers.
Let’s break down the data, starting with the used market and following the breadcrumbs to the new.
Based in Daytona Beach, Florida, Josh Logan provides data-driven analysis from the unique perspective of a seasoned automotive professional. His goal is to empower consumers with insider knowledge to navigate the complexities of the modern car market.
The Used Vehicle Market Snapshot (August 2025)
The wholesale market, where dealers acquire their inventory, showed surprising strength by not declining as is typical for late summer. Prices held firm, indicating that demand for quality used vehicles remains robust.
The Manheim Used Vehicle Value Index (MUVVI):
| Metric | MUVVI |
| Current (August 2025) | 207.4 |
| vs. July 2025 (MoM) | 0.0% 207.4 |
| vs. Aug 2024 (YoY) | ▲+1.7% 203.9 |
| vs. Dec 2024 (YTD) | ▲+2.6% 202.0 |
Source: Cox Automotive, Manheim Used Vehicle Value Index, Report released September 8, 2025.
The data shows that while the market has been volatile, wholesale prices are now up 2.6% since the beginning of the year and are still higher than they were this time last year. This resilience is a direct result of the “Great Squeeze” on consumers, who are flocking to the used market in search of affordability, which in turn is keeping these wholesale prices elevated.
The Rental Fleet Connection
When digging a little deeper inside the report, we find the perfect “bridge” that connects the stable used market to the chaotic new market. The report reveals a crucial data point about what’s happening to the cars coming out of rental fleets:
“The average price for rental risk units sold at auction in August increased 4.7% year over year.“
This is critical. Not only are used car prices stable overall, but the prices for the highly desirable 1-2 year old former rental cars are actively increasing. This proves there is a huge appetite for these nearly-new vehicles. And who is buying hundreds of thousands of new cars to eventually feed this pipeline? The rental companies themselves.
A Fleet-Fueled Mirage
This brings us to the new car market. The headline SAAR of 16.1 million looks strong, but the Manheim report gives us the context we need to see the truth. The report states:
“Combined sales into large rental, commercial, and government fleets rose sharply, up 29.4% year over year in August… the remaining new retail sales were estimated to be up only 2.5% from last year.”
This is the smoking gun. The new car market’s strength in August was not driven by a huge wave of everyday consumers, but by an explosive surge in sales to rental companies. They are aggressively restocking their fleets, likely to meet travel demand, along with potential gambles to avoid any tariff implications and to eventually sell their used units for a high price at auction, as proven by the data above.
This suggests that automakers, facing high production costs, used the rental fleet channel as a massive release valve to move inventory and post a strong headline sales number, while the organic retail market for everyday buyers remains much softer. The calm in the used market is, in a way, fueling a mirage in the new market.
The “Beat the Tariffs” Motive
This massive push into fleet channels is likely a strategic move to front-run the impact of tariffs. As we’ve extensively covered, tariffs and exploding producer prices (PPI) are crushing automaker margins. By selling a huge volume of vehicles to large fleet partners before potential new tariffs hit or are fully priced in, they can move inventory at a known cost.
It’s a short-term strategy to manage a long-term financial crisis. It keeps production lines moving and generates positive sales headlines, but it doesn’t reflect the true health of the consumer market.
The “Canary in the Coal Mine”
Consumer Confidence Falters
Is the “explosive growth” we’ve seen this summer a true reflection of consumer demand, or is it a fleet-fueled mirage designed to beat tariffs and manage a growing inventory problem? If we analyze the report a bit further we can see the used car market is now showing signs of stress. While the Manheim Index was flat for the month, the report notes:
“Consumers’ views of buying conditions for vehicles declined to the lowest level in three months as views of both prices and interest rates deteriorated.”
This is a critical disconnect. Automakers are pushing new cars into the system at a record pace, while actual consumers are becoming more pessimistic about their ability to afford a vehicle. This supports the idea that the strong new car sales numbers are not being driven by confident consumers, but by large-scale corporate fleet purchases.
A Market Propped Up
The August sales report is not a story of organic consumer strength. It’s the story of a market being propped up by a massive, and likely unprofitable, surge in fleet sales. This was a strategic move by automakers to manage the twin crises of a potential inventory glut and the crushing pressure of the “Great Squeeze.”
It was a successful short-term maneuver, but it masks the underlying weakness in the retail market. The real question is: what happens in the coming months when this fleet channel is full and automakers have to face consumers who are increasingly concerned about prices and interest rates? The mirage can only last for so long.
Stay Tuned!
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