👀 Used Car Prices Are Rising Again—Could Trump’s Tariffs Drive Them Even Higher?

Key Takeaways

• The used car market may heat up again, this time because of auto tariffs.
• Used cars prices have been rising steadily since October 2024.
• Under 25% tariffs for all imported cars, new cars may get more expensive, in turn driving customers to the used car market

The Tariff Math on Car Prices

Half of the 16 million new cars sold in America in 2024 were imported.

A 25% tariff on an imported new car that costs $40,000 will result in a tax of $10,000.

If automakers choose to pass on those prices to the customer, the same car now costs $50,000.

In this scenario, customers may start flooding the used car market, which will drive up prices there as well.

A tariff on imported auto parts is also expected in May, which may drive up car prices further.