In the past four weeks, the retail listing price for used vehicles jumped an average of 2%. It has recently gone over the $25,000. All this is contributing to higher prices as tariffs on new imported vehicles and parts continue to be in effect. So while these tariffs have not directly targeted sales of used vehicles, they are drowning the entire automotive market. Cox Automotive recently reported that the average retail listing price for new vehicles is nearly $48,000. Diving deeper, this increase adds an additional burden to consumer budgets while they shop around.
Used vehicle prices have dropped considerably from their record highs seen during the Covid pandemic, as tracked by the Manheim index. It’s still pretty high by historical standards before 2020. To date, retail prices to consumers have followed wholesale price increases and decreases in lockstep. Notably, in recent years, used vehicle wholesale prices haven’t fallen as sharply. The average retail listing price for used vehicles has already jumped by 2.7% since March. This large increase is particularly surprising, as month-to-month index changes typically hover at about 0.2%.
Jeremy Robb, Cox Automotive’s senior director of economic and industry insights, noted that this year’s jump is notable. It departs sharply from the usual seasonal patterns we’ve observed in previous years.
“The ‘spring bounce’ normally ends the second week of April, but this year, wholesale appreciation trends continued for the entire month and were much stronger than we typically observe.” – Jeremy Robb, Cox Automotive senior director of economic and industry insights.
Price increases expected and predicted in response to the new tariffs are already starting to occur. These tariffs mean a damaging 25% tax on hundreds of new imported vehicles and parts. On the surface, these tariffs don’t directly target used car sales, but they significantly affect new vehicle transaction prices and national production levels which factors into consumer demand. Each of these factors sends ripples that impact the used car market, too.
Robb commented on the predicted impact of the tariffs on vehicle prices.
“We expected to see strong price appreciation in response to the tariffs, and that’s exactly what came.” – Jeremy Robb, Cox Automotive senior director of economic and industry insights.
It’s the used car market that is the main channel through which the majority of Americans acquire vehicles. Consumers are escaping the grips of record high prices and economic strain. Consequently, they face a difficult environment as they try to choose the right vehicles to purchase.