This Car Price Index Jumped to Its Highest Level Since 2023: Are Higher Car Prices Next?
Written by
Terence Loose
Edited by
Zuri Anderson
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The past few months have been hard on those looking for a new — and used — ride. Used car prices raced up by 4.9% year-over-year for the month of April 2025, according to Cox Automotive’s Manheim Used Vehicle Value Index. That was after being up by 2.7% from March 2025, the previous month.
It’s the highest jump in used car prices since 2023. Analysts think that might foretell rising car costs — both new and used — throughout the year.
New Car Tariff Disruption
By now, it’s common knowledge that tariffs work like a tax on the American importer, and are often passed down in part or in their entirety to the consumer. And since cars are expensive items, the impact can be sticker shocking.
And although following the tariff roller coaster is anything but simple, on Apr. 3, following the expiration of U.S. exemptions under the U.S.-Mexico-Canada Agreement (USMCA), a 25% tariff was imposed on all imported cars. That disrupted the auto supply chain and automakers warned that the costs of the tariffs would be passed onto customers.
That resulted in a lot of talk of higher car prices. For instance, a May 1 report by Anderson Economic Group estimated that new auto prices could jump anywhere from $2,500 to $15,000, depending on the make and model. All that sent many buyers to dealer lots to buy cars brought in before tariffs took effect.
Used Cars Aren’t Immune
As new car prices rise, analysts say that more buyers may turn to the used car market, driving prices up there, too — hence, the March and April jumps in prices. And while used car prices have been less affected by tariffs than new car price projections, according to Carvana CEO Earnie Garcia, they are not immune.
And in fact, Cox reported that the average used car retail listing price was up 2% in four weeks, to over $25,000. In the same time frame average new car prices hit $48,000.
Possible Relief
Not surprisingly, the tariff landscape changed recently — again — for the auto industry. According to Reuters, after the auto industry cried foul and pleaded with the Trump Administration, on Apr. 29, yet another executive order gave American automakers credits of up to 15% of the value of U.S.-assembled cars and trucks. That helps offset the price of the tariffs, but not eliminate it.
That and other exemptions and allowances were designed to mitigate the damage of the tariffs and the cost to consumers. Still, the cost to automakers, and car buyers, remains significant.
What Comes Next?
With a seemingly ever-changing trade policy and tariff landscape, uncertainty is high. That usually doesn’t bode well for the consumer. So, according to Kelley Blue Book, even with the uncertainty, analysts expect new and used car prices to remain high or increase in 2025.
More From GOBankingRates
Sources
- Manheim, “Used Vehicle Value Index.”
- Anderson Economic Group, “Tariff Costs for U.S.-Assembled Vehicles Drop Under ‘Adjusted’ Policy.”
- Investor’s Business Daily, “Used-Car Prices Jump On Tariffs, Lifting Carvana, These Other Auto-Retail Stocks.”
- CNBC, “Used vehicle pricing barometer jumps to highest level since 2023 amid auto tariffs.”
- Reuters, “Trump set to soften auto tariffs after industry pushback.”
- Kelley Blue Book, “When Will New Car Prices Drop?“
