Cox Automotive expects steeper used car price declines than earlier predicted

If used car price stabilization occurs through inventory rebalancing and demand normalization, dealers and auto finance companies could see margin pressure ease, though this would likely benefit fuel-efficient and EV segments disproportionately while pressuring traditional ICE vehicle valuations.

Continued gradual price erosion in used vehicles without sharp intervention would plausibly keep downward pressure on dealer profitability and captive finance arms, while reinforcing the structural shift toward efficiency-focused inventory that may take years to fully resolve.

A sharper-than-expected collapse in used car values—particularly for older, less efficient models—could amplify losses for dealers holding inventory and pressure subprime auto lenders exposed to depreciation risk, while accelerating the stranded-asset problem for traditional powertrains.