It’s not hard to see how the Trump administration’s tariffs on imported cars, parts, and materials can increase prices on new cars from the imported Chevy Trax to the American-built Ford F-150. Companies will have to pay more up front to bring in any of those items, and that means companies have to raise prices on those products to cover their costs, leaving the consumer paying for them. It seems they may be affecting more than just new car prices, though. According to the Manheim Used Vehicle Value Index from Cox Automotive, used car prices are climbing, and they’re higher than they were more than a year ago. Cox Automotive’s Senior Director of Economic Industry Insights, Jeremy Robb, points to tariffs as a contributing factor due to increased volatility in car market pricing. We wouldn’t be surprised if the frequent delays to tariff implementation also contributed to that volatility.
Used Car Prices Are Up Pretty Much Across The Board
The Manheim Used Vehicle Value Index boils down a number of factors in used vehicle pricing based on mileage, segment, age, and the actual price in order to get a specific number indicating used car wholesale pricing. For June, the number is 208.5. To give that number some meaning, you have to look at the numbers for past months and years. Compared to last month, the price index has risen 1.6%, and it’s the highest it has reached this year. More telling is the fact that it has risen a full 6.3% since last June, which was the lowest point for vehicle prices since early 2021. This month’s 208.5 index is also the highest the market has reached since October 2023. This index rating isn’t as high as it was in the peak of the pandemic market through 2021 and 2022, but the rise is concerning.
Related
Tariffs Aren’t The Only Reason Used Cars Are Probably Going To Keep Getting Pricier
Five years on, COVID is still infecting the car market.
The Manheim Index also shows how price increases break down by segments and powertrains. Interestingly, EV prices are up much more than combustion-car pricing at 12.1% versus 5.6%. SUV price increases were nearly the same as the overall average at 6%, which makes sense considering how they’re easily the majority of the market now. Pickup trucks and midsize cars were tied for the lowest increase at 2.8%, and one segment slightly went down in price. That was the compact car segment, which dropped by 0.1%.
Some Other Takeaways From The Index
Along with increased prices, used-car inventory has been dipping. According to the report, wholesale inventory is down 3% over last year, and the number of days of inventory is down 5% to 25.1 days. Cox is also expecting inventory to stay reduced through the year, and may drop even a bit more next year. Values are likely to still be higher than they were last year over the next few months.
Related
Automakers Drastically Reduce US Car Shipments To Avoid Tariffs
Two other statistics also stood out to us from the Manheim Index. The first was the fact that the average age of used cars is at the highest they’ve been in a decade. The average is now at 6.7 years, and 43% of used cars are older than 6 years. The average vehicle age has been rising since 2019, with a big spike at the start of the pandemic going from 5.4 years old in 2019, to 6.1 in 2020.
Related
Shocking Study Reveals Which Car Brands’ Used Vehicles Are Tanking In Value
If you’re looking for a bargain, check out these companies.
The other thing that got our attention was the number of used EV sales. In the second quarter of this year, those sales topped 100,000 for the very first time. It also beat last quarter, which was the previous record setter with more than 80,000 sales. It’s not entirely surprising, since even with slowed demand for new models, there are simply more EVs out and about than ever before, so naturally they’re trickling into the used market.
Source: Manheim by Cox Automotive
#Car #Prices #Reach #High #Year #Tariffs #Contributor
