The news: Rising vehicle ownership costs are extending into the used-car market, limiting relief for households grappling with high transportation expenses. The Manheim Used Vehicle Value Index rose 3.6% in May from a year earlier and 0.3% from April, per Cox Automotive.

Nonadjusted wholesale used-vehicle prices were also up 3.1% YoY, though down 1.2% from April.

The rise comes as payments and loan balances climb for both new and used-car buyers, per Experian Automotive data.

• About 19% of new vehicle loans carried monthly payments of at least $1,000 in Q1 2026, up from 5.4% five years ago and 17.4% a year earlier.
• Nearly three-quarters of those payments were attached to non-luxury models, including pickup trucks like the Ford F-150 and Chevy Silverado 1500.
• The average amount financed for a new vehicle in Q1 was a record $43,952, and the average monthly payment climbed to $770 from $748.
• Average used vehicle monthly payments rose to $531 in Q1 from $523 last year, while the average loan amount was up $785 to $27,070.

Delinquencies remain below 2018 levels, but there are signs of stress. The share of new-vehicle loans more than 30 days past due has edged up to 2%, and 60-day delinquencies have also risen, driven largely by subprime borrowers, per Experian.

Why it matters: The Manheim data suggests consumers looking to trade down to used cars may not find much financial relief, adding to a broader picture of consumer strain.

Fidelity data shows more workers tapped retirement accounts in early 2026, with 19.2% holding an outstanding 401(k) loan at the end of the first quarter, up from 18.8% a year earlier, while hardship withdrawals rose to 2.5% from 2.3%, per CNBC reporting. That suggests more consumers are seeking cash buffers as car payments and other essential expenses take up more of their paychecks.

Implications for retailers: Rising vehicle costs can leave consumers less bandwidth for discretionary purchases. Because many of the highest payments are tied to mainstream vehicles rather than luxury models, rising vehicle costs may be affecting households across a wider income spectrum, with possible implications for discretionary spending.

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