Prices for used cars are likely to keep rising if the Trump administration maintains hefty tariffs on imported cars and parts
- Used cars under five years old just saw their first price increase since late 2022.
- The 1% increase marks the start of potential price hikes in the used-car market.
- One study compares this trend to how used cars surged in price back in 2020.
It’s no secret that new cars are becoming more expensive. Sticker prices continue to climb, even as technology and production methods improve. Until recently, though, the used-car market was a different story. Prices had been dropping or holding steady, offering at least some relief for buyers. But now, that may be changing. A new study shows that, for the first time since 2022, used-car prices are on the rise again – and there may be more of that ahead.
More: The Real Victims Of Trump’s Tariffs Might Be American Carmakers Themselves
That shift marks a clear break from the trend we’ve seen over the past couple of yea. Used cars were getting more affordable, including a 7.3% dip in prices in June 2024. Then, for around six months, their prices were stable, hovering close to their overall value from a year ago. Unfortunately, that’s no longer the case.
A Modest Climb, But a Potential Warning Sign
According to a recent iSeeCars study, the average price of one- to five-year-old used vehicles is now one percent higher than it was a year ago. That translates to an average increase of about $317. On its own, that number might not sound alarming, but it could be the start of a broader trend, especially when viewed in context.
SUVs saw the largest overall increase of 3.5 percent, followed by trucks (0.9 percent) and hybrids (0.7 percent). However, two segments have seen their prices drop instead of rising: electric vehicles (down 10.1 percent and passenger cars grouped with minivans (down 3.2 percent).
USED CAR PRICES 1-5 YEAR OLD
iSeeCars Executive Analyst Karl Brauer believes this upward pricing pressure isn’t going away anytime soon. “Now used car prices are going up, and this is before tariffs have impacted new car pricing, which will add further upward pressure to both new and used car prices,” he said. That means unless there’s a policy reversal from the Trump administration, the trend could worsen in the months ahead.
Automakers are already scrambling to make up for the cost associated with the new tariffs. Some have even gone as far as to freeze exports to the United States altogether. meaning that customers have a limited inventory from which they can choose. Since there aren’t any indications that demand is diminishing, logically prices will climb.