How Used-Car Prices and Total Losses Affect Insurance

Used-car prices matter to car insurance prices because the physical-damage parts of a policy, collision and comprehensive, are tied to what a vehicle is worth. When used vehicles cost more to replace, a total loss costs an insurer more. That cost is one input among several when insurers price those coverages. When used-car prices fall, the replacement-cost pressure eases, though other costs can still push prices up.

Used-car prices also don't move in a straight line. The Manheim Used Vehicle Value Index, a widely followed measure of wholesale used-vehicle prices, was 205.9 in September 2026, a 0.6% decrease from September 2025 ¹. That index is adjusted for mix, mileage and seasonality. In other words, wholesale prices are roughly flat to slightly lower than a year ago. They are not surging.

Liability coverage pays for harm you cause to other people and their property. Collision and comprehensive coverage deal with your own vehicle. Collision applies to crash damage. Comprehensive generally applies to things like theft, hail or flooding. The more a vehicle is worth, the more an insurer may have to pay if it is stolen or too damaged to fix.

A vehicle is typically treated as a total loss when repair costs approach or exceed what the vehicle is worth. So two things drive total-loss costs: how much it costs to repair cars, and how much it costs to replace them. The value of the car is the ceiling. When used-car values are high, a total loss costs more. When values are lower, repairs reach the "total" line sooner relative to value. Each insurer sets its own rating approach, and states have their own rules and filing processes.

For the repair side of the equation, see How Repair Costs Push Car Insurance Prices Up.

Industry indexes give a read on where replacement costs are heading. The September 2026 Manheim data gives several signals:

The index is down 1.1% month over month. ¹

Non-adjusted wholesale prices are down 1.2% year over year and down 1.3% against August. ¹

Prices for the Three-Year-Old Index decreased 1.7% in September, more than the typical 1.5% decline for the period. ¹

Cox Automotive's chief economist said depreciation ran steeper than is typical for this time of year. He pointed to higher fuel prices, rising interest rates and the lack of a September Atlantic hurricane, which usually adds some used-vehicle demand ¹.

By segment, the report said strength among EVs and compact cars was more than offset by midsize cars, pickups and SUVs, which continue to trend down ¹. Because vehicle type is part of how coverage is priced, segment differences can matter more to one driver than the overall index does.

It would be tidy if a dip in used-car values showed up immediately on your renewal. It generally doesn't, for a few reasons:

• Rates look backward and forward. Insurers use past claims and cost trends, and filed rates take time to work through. Wholesale prices are a snapshot of one month. A flat year-over-year reading doesn't undo earlier increases.
• Other costs move too. Parts, labor, medical costs, weather losses and theft all feed into pricing. See How Vehicle Theft Rates Affect Car Insurance Prices and How Hail, Floods and Severe Weather Push Auto Rates Up.
• Wholesale isn't retail. The Manheim index tracks wholesale auction prices. What a consumer pays at a dealer can differ, and so can what an insurer's valuation shows for a particular car.
• Your own factors still count. Your vehicle, location, driving record and coverage choices all affect your price, no matter what the market does.

None of this means a given price will rise or fall. It explains one force behind the physical-damage portion of pricing.

Knowing that replacement value drives collision and comprehensive costs can help you read your own policy. Look at which coverages you carry and the deductibles on them. Your insurer or agent can explain how your car's value is handled. For questions about your policy, or a specific claim or dispute, contact your insurer and your state's department of insurance.

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• ¹ Reported: Manheim Used Vehicle Value Index readings for September 2026 (205.9, year-over-year and monthly changes, Three-Year-Old Index change) and the Cox Automotive economist's commentary, published by Cox Automotive on October 7, 2026.