Americans hate, hate, hate high gas prices, but they’re less sensitive to them than auto dealers ironically expected.

By Wolf Richter for WOLF STREET.

The spike in gasoline prices from February through mid-May did a job on auto dealers, and they piled into wholesale auctions and bid up prices of used EVs, expecting huge retail demand from consumers trying to dodge those high gas prices that were apparently ruining their lives. And prices of used EVs at wholesale auctions spiked by 11.5% seasonally adjusted in February through June, the biggest such spike since the craziness in 2021 and 2022, while prices of non-EVs dipped by 0.3%. EVs are battery-electric vehicles and do not include hybrids (hybrids are in the category of non-EVs along with all other ICE vehicles).

But then in July and August combined, prices of used EVs at wholesale auctions plunged by 6.6% seasonally adjusted, giving up all but the February portion of the five-month spike, as dealers got cold feet (red line in the chart), while prices of non-EVs fell by only 1.7% over those two months (blue line), according to the Manheim Used Value Index today. Manheim, a subsidiary of Cox Automotive, is the largest auto-auction house in the US where dealers go to replenish their inventories of used vehicles.

This is pretty crazy behavior by dealers buying used EVs, while pricing of non-EVs was boringly below normal. It seems dealers were misled by all the moaning and groaning about high gas prices.

Supply at these auctions comes from rental fleets that sell vehicles they pulled out of service, from finance companies that sell their off-lease vehicles and repos, from corporate and government fleets, etc. Dealers buy at these auctions to replenish their inventories.

Beyond the moaning & groaning about gas prices.

In 1972, just before the 1974 Oil Crisis, about 4% of total consumer spending went to gasoline and other energy goods (utility natural gas, heating oil, etc.). By 1980, spending on gasoline and other energy goods ate up over 6% of total consumer spending.

A lot of things happened since then that reduced the importance of gasoline in the consumer spending basket, including more fuel-efficient vehicles and fewer miles driven per capita, which combined into plunging gasoline consumption per capita, from a high of 42 gallons per month in 1978 to 33 gallons per month in 2025. At the same time, spending on other categories, particularly housing, healthcare, and other services have soared.

And so in the six-month period through January 2026, before the price spike, only 2% of total consumer spending went to gasoline and other energy goods.

Then gasoline prices spiked, and in April 2026 absorbed nearly 2.5% of total consumer spending, before the share began to drop again, and in July was down to 2.2%.

Americans hate, hate, hate higher prices. And higher gasoline prices hit us in the face every time we get gas, and every time we drive by a gas station. It’s just relentless.

But spending on gasoline and other energy goods just doesn’t measure up compared to the soaring amounts we spend on housing, health insurance, other insurance, other services, food, and durable goods.

Gasoline price spikes hurt, they’re in your face every time you drive by a gas station. But economically, they just aren’t what they used to be, so to speak. They weigh much less in the overall spending basket, and so consumers aren’t that much influenced by gas prices when they make long-term spending decisions, such as what vehicle to buy.

Big powerful pickups with lousy fuel economy still rule, regardless of the price of gasoline. And auto dealers, who sit in the middle of selling big powerful pickups with lousy fuel economy that they make lots of money on, thought ironically that Americans would switch in large numbers to used EVs because gasoline prices rose? Overall demand for EVs, just like overall demand for pickups, isn’t driven by gasoline prices, but by Americans wanting to buy what they want to drive.

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the mug to find out how: