After a recent period of stabilization, the cost of used cars is once again on the rise, and a new analysis suggests that potential tariffs could send prices soaring by an average of $3,000. The study, conducted by the car search engine iSeeCars, paints a concerning picture for consumers already grappling with inflation.
“Used car prices had been falling… but over the past 6 months, used car prices stabilized,” said Karl Brauer, iSeeCars Executive Analyst. “Now used car prices are going up, and this is before tariffs have impacted new car pricing, which will add further upward pressure.”
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The analysis highlights that nearly every major vehicle segment saw a price uptick. SUVs led the charge with a 3.5% increase, followed by trucks at 0.9% and hybrids at 0.7%. Interestingly, electric vehicles and traditional cars/minivans bucked this trend, experiencing price drops of $3,602 and $865, respectively.
Compounding the recent price rise is the potential impact of tariffs that went into effect on April 3rd. iSeeCars predicts that these tariffs could drive the cost of popular used cars up by an additional 5% to 10% in the coming year. This projection is based on the market dynamics observed during the early stages of the pandemic, where new car supply chain disruptions led to an 8.2% surge in used car prices over just eight months.
The study provides a stark illustration of how these tariffs could affect popular models. For instance, a 5% price increase could add $890 to the cost of a Kia Forte, while a 10% increase could inflate the price of a Chevrolet Tahoe by a substantial $5,169.
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“During the pandemic, new car prices spiked when automotive factories closed and production fell short of demand,” said Brauer. “With tariffs, prices will likely increase regardless of demand, setting up a similar new car price spike that could pull used car prices up.”
The iSeeCars study paints a concerning picture for consumers in the used car market. The combination of tightening supply and the ripple effect of tariffs on new car prices suggests that the recent price increase may be the beginning of a more significant upward trend.
“A price bump between $1,300 and $3,800, depending on vehicle segment, is probably not what the average used car shopper wants to face over the next 6 to 12 months, but it’s a definite possibility if new car pricing rises,” said Brauer.
While cars and minivans, along with electric vehicles, currently offer some relief with lower year-over-year pricing, the broader market trend and the looming impact of tariffs indicate that finding a bargain in the used car market may become increasingly challenging in the near future.
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