Why new car tariffs will push DC-area used car prices up as much as 10%

Hefty tariffs on new vehicle imports have already resulted in more would-be car buyers moving up plans to buy in order to avoid the tariff effect, likely to show up on sticker prices once dealerships have depleted their existing inventories of pretariff imports.

More buyers may turn to the used vehicle market, expecting to avoid the tariff shock to new vehicle prices. Used vehicles would not be subject to any import tariffs, but used vehicle prices will almost certainly go up because of tariffs anyway.

鈥淯sed vehicle prices are always tied to the new vehicle market. It鈥檚 pretty easy to imagine that if you see a new vehicle and its price goes up, you are going to send more people into the used market because they cannot afford a new vehicle any longer,鈥� said Karl Brauer, senior analyst at vehicle search site .

iSeeCars estimated the potential impact of new vehicle prices on the used vehicle market, specifically in the D.C. market, and based on the increase in used vehicle prices seen in 2020, when a pandemic shortage of new vehicles flooded the used market with buyers, it sees a tariff-related boost in used vehicle prices of 5% to 10% this year.

Should buyers be racing to the market right now? Maybe not.

Vehicle sales rose 22% in March, with buyers looking to make their purchase now, perhaps earlier than they had planned. But consumers who are not really ready to buy right now should not feel pressured to doing so. Other tariff rollouts announced by the White House, then reduced or rescinded, have already been chaotic.

鈥淚t鈥檚 tough for everyone 鈥� from automakers to dealers to consumers 鈥� to really know. Because we don鈥檛 know how long tariffs are going to last. If you can鈥檛 buy for a while, don鈥檛 worry, just wait. Maybe by the time you would otherwise be ready to buy, six or 12 months from now, it will be much more settled down again,鈥� Brauer said.

Used vehicles are not entirely immune from import tariffs. Tariffs currently also cover imports of replacement auto parts. Brauer said for any used car buyer, the best 鈥� but probably more expensive 鈥� way to avoid higher used vehicle auto repairs because of parts tariffs, is to shop for certified pre-owned vehicles. CPOs have limited extended warranties.

鈥淪o you can get new car-like coverage on used vehicles. You will pay a little but more, but you鈥檒l get that new car peace of mind,鈥� he said.

Used vehicle prices in the D.C. market have been rising in the past year, without being influenced by any tariff effect. iSeeCars said the average price of a one- to five-year-old used vehicle at D.C.-area dealerships in March was $30,401, 1.7% more than a year ago. Nationally, used vehicle prices have risen 1% in the past 12 months.

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