As September and the third quarter ended last week, so did federal tax incentives on electric vehicles.

That and other goings-on in Washington appeared to have some impact on the overall automotive market and were top-of-mind in the monthly vehicle value indices released by Black Book and Cox Automotive this week.

Starting with Black Book’s report, its seasonally adjusted Used Vehicle Retention Index came in at 144.4 in September, which was down 1.4% from August and off 1.3% from a year ago.

“Depreciation accelerated in September, driving a 1.4% decline in the Black Book Used Vehicle Retention Index — the largest monthly drop so far this year,” said Black Book vice president of data & analytics Laura Wehunt, who is among the speakers at Used Car Week next month.

“New-vehicle sales were strong, fueled by consumers eager to purchase hybrid and electric vehicles ahead of the September 30 federal tax credit expiration,” Wehunt said in Black Book’s report. “Dealers had hoped the Fed’s rate cut would spur more activity, but with the announcement of two additional cuts planned for 2025, many consumers appear to be holding off on purchases, slowing retail demand.”

Over at Cox Automotive, its Manheim Used Vehicle Value Index was at 207.0, which was off 0.2% from August and up 2% from September 2024, when adjusting for mix, mileage and seasonality.

Unadjusted, the index was up 0.1% month-over-month and 2.1% year-over-year.

“As we close the books on Q3, we’ve continued to see wholesale values remain elevated against normal depreciation trends, even with declines in September and right as tax incentives on EVs come to an end,” said Jeremy Robb, deputy chief economist for Cox Automotive, in an analysis accompanying the index.

“Both new and used retail sales were fairly elevated over most of Q3, but we started to see some declines in the last few weeks of September. Simultaneously, we observed that weekly wholesale valuations declined a bit more than earlier in the month, as the relationship between supply on dealer lots and wholesale values remains strongly intertwined.”

On the retail side of the market, Cox Automotive said in its report that it has increased its full-year used-car sales forecast slightly, projecting between 37.9 million and 38.5 million sales.

However, there could be a challenging fourth quarter in store for dealers, amid supply slowing, tariff-driven high prices and an increase in interest rates.

“Our biggest question heading into Q3 was about the impact of tariffs on the economy and auto markets; but thankfully those fears didn’t come to fruition,” Cox Automotive chief economist Jonathan Smoke said in the report. “Year to date, the economy and auto market have performed better than we had expected, and we believe tariffs have actually led us to a stronger used-vehicle market.”

Smoke added: “The signs from the last few weeks are not promising. September ended with used-vehicle prices at their highest point since the start of the year. Used-vehicle sales have seen a slowdown, and when coupling that with interest rates moving up, the picture for Q4 isn’t the prettiest … We’re not expecting the economy to crater or vehicle demand to decline substantially because we still have pent-up demand. However, the fourth quarter is likely to be the most challenging this year.”