5 Reasons Used Car Buyers Face Higher Prices and Fewer Choices in 2025

As the automotive resource website Edmunds has reported, used vehicles that are approximately 3 years old are the “cornerstone” of the used car market — most are still under the umbrella of warranty coverage, come with a lot of relatively “new” car value and overall are the most wanted in the used car market.

Despite that, Edmunds warned that 2025 could be a rather difficult year for shoppers hoping to find and buy reasonably priced newer used cars. Here’s why.

The relationship between the new car market and the used car market is a symbiotic one, with the repercussions of one impacting the other. During the COVID-19 pandemic, economic uncertainty (coupled with supply chain issues) significantly stymied the new car market. As fewer new cars were purchased during the pandemic era (and subsequently traded in), there are fewer used cars available.

In 2022, only 13.8 million new cars were sold, according to Edmunds (the lowest since the crippling recession-era 12.8 million sold in 2011). Three years later, that translates into an extraordinarily small amount of used cars that are 3 years old being released into the market.

As Car and Driver has reported, with the institution of President Donald Trump’s 25% tariffs on all cars imported to the United States, new car prices are expected to rise — pushing even more car shoppers toward used vehicles. That increase in demand for used cars likely will diminish stock, leading to higher prices for previously driven vehicles.

Because of the limited availability of newer used cars, average transaction prices are now higher. Prices of 3-year-old used vehicles increased by 3.3% in the fourth quarter of 2024, from $28,772 to $29,710, per Edmunds. 

With so many people holding off on buying new cars between 2020 and 2023 (and thus holding onto their current cars for an extra three to four years), the current age of cars being traded in on new car sales is around nine years.