Used Car Prices Are Exploding And Buyers Are Still Lining Up For Them

Economists have warned that tariffs could result in issues that mimic those caused by the pandemic and chip crisis. This already appears to be playing out as CarFax says the “surge in used car prices is nearly two times compared to this time last year and the surge in sales is more than twice what we saw last Spring.”

In effect, used cars are more expensive but selling like hotcakes. This can likely be chalked up to tariffs as consumers have rushed to dealerships to buy new and used vehicles before prices jump by thousands of dollars.

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However, that isn’t the only thing at play as CarFax noted there’s a “worsening used car shortage.” This is helping to drive prices up and the average cost of used non-luxury SUVs jumped $400 last month. Trucks climbed roughly $250, while van prices skyrocketed by $800.

While CarFax curiously didn’t mention tariffs, they pointed to “growing economic uncertainty motivating many car buyers.” They also noted things are likely to get worse before they get better.

According to CarFax’s Srinidhi Melkote, “We expect this surge in car prices and sales to continue. The strong new car demand has pushed new car prices up and supply down, leading some consumers to turn to used cars for a more affordable option. This shift in consumer behavior will drive up used car prices as well, creating a cascading effect across the market.”

It also goes without saying that automakers have paused production and shipments of some models in response to tariffs. These moves will likely add to the price pressures, while also thinning out dealership lots.