As President Donald Trump’s on-again-off-again attitude on tariffs wreaks havoc on the automotive industry, manufacturers are doing everything they can to avoid increasing the price of new automobiles. The worry is that this could drive a considerable number of customers to the used market, pushing prices upward in that sector as well. It’s still unclear if this will cause the same pandemic-induced shock-and-awe that the used market experienced five years ago, but the situation is evolving every day. Here’s everything we know at the moment.
Industry By The Numbers
Should new cars become more expensive, many industry experts like J.D. Power forecast that used cars will follow suit. “The strong March sales pace, combined with high average transaction prices mean consumers will spend more money buying new vehicles this month than any other March on record,” Thomas King, president of J.D. Power’s Data Analytics, said in a recent press release. We’ve likely yet to see the full effects of tariffs, as many automakers are clinging to the vehicles they already have on the lot that were built before everyone knew the word ‘tariff.’ For instance, Land Rover and many other world automakers have stopped importing vehicles into the United States altogether.
As we’ve yet to feel the full brunt of tariffs in the automotive industry, used cars haven’t increased in price all that much. J.D. Power data shows that the average used vehicle price is trending towards $28,552—a mere $22 down from this point last year. For context, the same data set shows the average price for new cars trending towards $44,849—up $637 from March of 2024. If we do the math, that’s a difference of $16,297.
Buying Used Isn’t a Massive Downgrade
Buying a used car can be an attractive option at the moment. Even at the best of times, a new vehicle purchase can be fraught with red tape—that new car smell is great, but you likely paid a dealer markup on a car that will depreciate faster, with an even higher sticker price thanks to tariffs. However, this influx of used car buyers is driving up the price of used vehicles, all thanks to our old friends supply and demand.
Even before this year’s tit-for-tat tariff tantrum began, new cars were the most expensive they had ever been—and were still climbing in price. Perhaps this was the catalyst for used-car reseller platforms like Carvana and CarMax’s recent rise in popularity. For those not in the know, the big C’s aim to bring the dealership experience to the used car market, offering perks like routine maintenance and multiple levels of warranty coverage. Carvana is particularly interesting, as they can deliver the car right to your door, and will even give you a seven-day trial period to see if you really like your “new” car. Oh, and they’ll take it back no questions asked. Pretty neat.
Let’s not forget that there are private platforms like Cars & Bids, Bring a Trailer, or even eBay Motors if you’re willing to take a bit more of a risk. While depreciation is a sore subject for those buying new cars, it means used buyers can get into some special cars for not a ton of money. We highly recommend a healthy dose of research when finding the car you want, locating a reliable mechanic in your area, and having them conduct a pre-purchase inspection on the vehicle you want to buy. Depending on the vehicle you buy, it’s also a good idea to budget for repairs—there’s a non-zero chance that the gains you make in the smiles-per-gallon department will be offset by maintenance.
Our Advice
If it were up to us, we would do everything in our power to avoid any kind of vehicle purchase until we know what is going on with the market. The surplus of automobiles that many automakers enjoy right now won’t last forever, with some only able to hold out through April. We also have to look at the 90-day pause that President Donald Trump placed on tariffs last week. Until then, it’s best to keep up with the maintenance on your current vehicle and nurse it along for as long as you can.
Matt Crisara is a native Austinite who has an unbridled passion for cars and motorsports, both foreign and domestic. He was previously a contributing writer for Motor1 following internships at Circuit Of The Americas F1 Track and Speed City, an Austin radio broadcaster focused on the world of motor racing. He earned a bachelor’s degree from the University of Arizona School of Journalism, where he raced mountain bikes with the University Club Team. When he isn’t working, he enjoys sim-racing, FPV drones, and the great outdoors.
