An increase in federal tax refund amounts has led to increased traffic at automobile dealerships and an indication that it could be a strong selling season this spring, automotive industry insights provider Cox Automotive reported.
Atlanta, Georgia-based Cox Automotive released its Manheim Used Vehicle Index on March 6, which follows the cost of used vehicles sold at wholesale auctions. According to Cox Automotive, wholesale prices for used automobiles rose by 4 percent in February versus year-ago data, and it was up by 0.8 percent from January.
Jeremy Robb, Cox Automotive’s chief economist, said that solid demand for vehicles at Manheim wholesale auctions and increased sales conversions point to a robust appetite from automotive dealerships to buy more used vehicles for resale.
“As we progressed through February, we saw prices move higher than usual, especially in the back half of the month,” Robb said.
“Now that we are officially in March, with warmer weather ahead across much of the U.S., we have seen retail demand increasing in our most recent data points—for both new and used sales.”
As the 2026 tax season enters its peak filing period, and returns are averaging about 10 percent higher than last year, dealerships are predicting increased traffic throughout March, Robb added.
According to the IRS, 2026 tax refunds averaged $3,804 through Feb. 21, and the IRS had refunded nearly $110 billion to 28.7 million Americans.
However, the war with Iran, along with rapidly rising fuel prices and other ongoing geopolitical concerns, could lead to a slowdown in vehicle sales, Robb noted.
“That may put a damper on consumer appetite in the short run,” he said.
“This could slow the building pace we see on the back of tax refund season, particularly as gas prices rise. The impact may be more acutely felt early in the month, with a pickup in demand building as we move through March.”
According to the American Automobile Association (AAA), fuel prices across the nation averaged $3.32 per gallon on March 6. A week ago, gas prices averaged $2.90 per gallon, AAA said.
Automotive dealerships had 26.7 days of used inventory at the end of February, Cox Automotive noted. That’s a 0.6 percent increase from the same month in 2025, but a 0.1 percent decline from wholesale used inventory levels in January.
Prices for rental vehicles, meanwhile, spiked by more than 9 percent year over year, and were up by 6 percent from January. The runup in price was primarily due to a 25 percent decline in average mileage across all rental vehicles from the same period last year, Cox Automotive said.
