Critical Shifts:
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Early Demand Indicator: Labor Day sales falling entirely in September will signal fall consumer demand strength.
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Heavy New-Car Incentives: Automakers are offering steep discounts on EVs and leftover inventory, putting added pressure on used vehicle values.
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Accelerating Wholesale Depreciation: Wholesale used vehicle values are dropping faster than historical norms, though retail inventory turning remains healthy at 34 days.
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Labor Day has long served as a major sales event for the auto industry, with manufacturers and dealers using the three-day weekend to capture late-summer buyers and, for new-car lots, clear remaining model-year inventory.
With this year's Labor Day weekend falling entirely in September, unlike 2025, when the holiday weekend began in late August—the sales event sits directly in this month's activity, making the first days of September an early indicator of where consumer demand may be headed for the rest of the year. If consumer demand holds through the holiday and into the following weeks, it could provide some support for a used market entering the fall with more pressure on vehicle values.
New-car incentives add pressure: Automakers are using the holiday to put substantial incentives behind select new vehicles, particularly leftover 2025 models, EVs and slower-moving inventory.
- Ford is offering up to $12,000 in dealer cash on select 2025 F-150s.
- Some EVs are carrying five-figure purchase or lease incentives.
- Low- and zero-percent financing offers are also being used to lower monthly payments.
- RAM is advertising discounts of up to 15% on select 2026 1500 models.
The offers vary by model and market, but the broader trend is clear: manufacturers are increasing incentives on vehicles where they need to stimulate demand. That could add another layer of pressure to used vehicles that compete directly with heavily incentivized new models
Wholesale depreciation accelerates: Black Book's latest data shows the wholesale market moving lower at a faster pace than typical seasonal patterns.
- Wholesale values declined 0.57% for the week ending Aug. 29, compared with a 2017-2019 average decline of 0.12%.
- Truck and SUV depreciation reached 0.58%.
- Black Book's August Used Vehicle Retention Index fell 1.2% from July to 144.3.
- The index finished 1.5% below August 2025.
Black Book expects depreciation to continue through the remainder of 2026, with additional pressure possible in the fourth quarter as new-vehicle incentives increase.
“Looking ahead, I expect depreciation to continue through the remainder of the year, particularly as manufacturers increase incentives in the fourth quarter, which has historically put additional pressure on used vehicle values,” said Laura Wehunt, vice president of data and analytics at Black Book.
Used demand remains healthy: Despite the depreciation trend, Black Book ended August with used retail days-to-turn at 34 days, while auction conversion remained strong. The next several weeks will show whether Labor Day shopping represents a seasonal burst or the beginning of sustained September and fall demand.
