February 2017 will go down in U.S. used vehicle market history as an underperforming month analysts didn't see coming. So, why were prices surprisingly down last month, when normally during the second month each year they start to bounce back?

There were a variety of factors for February's drop in used vehicle prices. According to market intelligence analysts at J.D. Power's Valuation Services division:

1. Manufacturers dialed up incentive spending 18 percent to help reduce new vehicle inventory levels that are at a decade-plus high.

2. Late-model auction sales volume continued to move higher, rising by 6 percent versus January.

3. Federal tax refunds haven't been distributed quickly compared to past years, which has given buyers the money they need to make their big-ticket used vehicle purchase. This is HUGE.