Used Car Prices Surge Nationwide as Tariffs Raise New Vehicle Costs

The used car market in early 2025 is experiencing rising prices and longer dealership wait times due to a combination of tightening inventories, older trade-ins, and tariffs on new vehicles. The average price of 3-year-old used cars has surged past $30,000, narrowing the price gap with new cars to under $17,000, reflecting a scarcity of near-new vehicles entering the used market. Tariffs imposed during the Trump administration on foreign auto parts and vehicles have contributed to higher new car prices, which in turn have driven up used car prices, as manufacturers and dealers attempt to absorb increased costs. Major automakers and dealers have passed these tariff-related expenses onto consumers, with some vehicles seeing price hikes exceeding $8,000, despite many vehicles having significant foreign-made components. This tariff-driven pricing pressure is compounded by shifting supply chains and pandemic-era supply shortages, leading to vehicles staying longer on lots and disrupting typical sales cycles. Industry experts note that the persistent trade policies and supply constraints have created a cyclical effect, limiting vehicle availability and maintaining upward price pressure in both new and used car markets.