- Car dealers paid about 1.6% more for the average used car at auction last month
- That’s fairly normal price inflation despite chaotic headlines
Car dealers paid 1.6% more for the average used car to restock their lots in June than they did in May, after adjusting for normal seasonal fluctuations.
That’s remarkable for how unremarkable it is. Tariffs have drastically increased expenses for automakers this year. Economists say that could trigger both new and used car prices to rise, as would-be new car buyers head to the used market looking for something they can still afford.
But the expected spike has been blunted so far.
The numbers come from the Manheim Used Vehicle Value Index, which tracks what dealers pay for used cars at auction. Kelley Blue Book parent company Cox Automotive also owns auction giant Manheim, which tracks the figure monthly.
New car prices have risen very little, remaining almost flat in May. Used car prices actually dropped in May.
Now, auction prices are following old patterns, rising at a fairly normal rate. Wholesale price changes tend to become retail price changes after six to eight weeks, so the adjustment likely means used car prices will change little in late summer.
A Spring Sales Rush Helped Dealers Restock
- Americans traded in a lot of cars in the spring
- That helped keep the used car supply high
“Historically, the used market has been incredibly consistent, but the pandemic disrupted much of that consistency, and starting in mid-2020, we saw much more volatility than we’d normally expect,” said Cox Automotive Chief Economist Jonathan Smoke. “What we are seeing in the Manheim Index over the course of the first half of this year suggests we could finally be out of that pattern.’
Smoke says tariffs, ironically, could be holding auction prices down. Americans rushed to sales lots to snap up cars at pre-tariff prices this spring, he says. Dealers used the vehicles they traded in to restock, which kept demand at auctions reasonable.
That increased supply of used cars is “driving the return to normal for the used-vehicle market, and this stability is what we expect to see in the second half of 2025,” Smoke says.
