Used Car Prices Rebound as Tariffs Loom

In a notable shift, the prices of 1- to 5-year-old used vehicles have recorded their first year-over-year increase since October 2022, according to recent data from iSeeCars. As of March 2025, the average price for a vehicle in this age category reached $31,624—a 1% increase, or $317, compared to the same period last year. This upward movement marks a reversal from the previous trend of depreciation seen throughout 2023 and into late 2024. The pricing increase was observed across most major vehicle segments, with the exception of electric vehicles (EVs) and cars/minivans, which experienced significant declines of $3,602 and $865 respectively. The divergence underscores evolving consumer demand patterns and market segmentation, particularly the continued softening of EV values amid fluctuating incentives and infrastructure challenges.

Compounding this dynamic is the recent implementation of tariffs on imported new vehicles, which are anticipated to exert upward pressure on used car prices due to redirected consumer demand. Although the tariffs did not take effect until April 3, the increase in used car pricing observed in March suggests that market forces may have already begun responding in anticipation. Historical parallels are being drawn to the early stages of the COVID-19 pandemic, during which used car prices surged by 8.2% over an eight-month span as new vehicle production was disrupted. While current conditions stem from trade policy rather than supply chain failures, the potential for a similar escalation remains. Projections from iSeeCars suggest that used car prices could rise an additional 5% to 10% within the next year, translating to increases ranging from approximately $890 for compact sedans to over $5,000 for full-size SUVs. With supply-demand imbalances already evident, the implementation of tariffs may catalyze further volatility in the used vehicle market, signaling broader implications for both consumers and industry stakeholders.