NEWSLETTER
You believe it or not, rates are not bad for all industries.
Of course, the automotive industry will feel the effects of 25% tariffs that the US has imposed on most imports. However, it is likely that this action also significantly increases the prices of new cars in the United States. That could easily be a blow to car manufacturers, since consumers tend to shy away large -scale purchases in thin economic times.
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Since new cars are expected to increase for national and foreign vehicles, it is easy to see why people would be optimistic about the used car market.
However, the increase in prices in a sector tends to have a domino effect in many sectors. The increase in new cars prices is already beginning to cause an increase in the used car market.
Shuttersock
Used cars buyers to face higher prices
Used cars prices had been stable or falling for months.
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In fact, prices have not increased since October 2022. However, that streak came to an end in March.
Used cars prices increased by 1%, or $ 317, year after year in March, according to ISEECARS.com data. The firm notes of this increase was before the tariffs came into force, which means that we could be sowing the beginning of a greater increase.
“Used cars prices had been falling up to 7.3% in June 2024, but in the last 6 months, cars prices used stabilized,” said Iseecars executive analyst Karl Brauer. “Now the prices of used cars are rising, and this is before the tariffs have affected the price of new cars, which will add a more upward pressure to the prices of new and used cars.”
ISEECARS analysts calculated the additional increase of 5% and 10% in the current price of the most popular models.
The average price of a Kia Forte would increase by $ 890 depending on an increase of 5%. A Chevy Tahoe would cost $ 5,169 based on an increase of 10%.
“During the pandemic, the prices of the new cars shot when the closed automotive factories, and the production did not reach demand,” said Brauer. “With tariffs, prices will probably increase independently of demand, establishing a similar increase in the price of the car that could draw used cars prices.”
A segment continues to see prices
According to the table, the average monthly prices have increased throughout the year, as well as the previous year.
However, a car segment is seeing prices: electric vehicles.
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The average prices of EV have decreased more than $ 3,600 in the last year, what Iseecars indicates is a marked contrast with the SUV prices and trucks, which have averaged increases of $ 1,000 and $ 337, respectively.
“Buyers looking for a used car bargain can still find lower prices in cars and minivans compared to a year ago, while EVs have not dropped more than $ 3,600,” Brauer said.
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But, ultimately, the company is still worried that we are only seeing the beginning of the increase in used cars prices. During the pandemic, the increase in new cars prices increased the prices of used cars.
In this scenario, popular used cars such as Ford F-150 could cost $ 4,000 more, while an Ford Explorer could cost $ 3,000 more.
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