How New Auto Tariffs Will Impact the Used Car Market in 2025
As of April 2025, the U.S. has officially imposed a 25% tariff on all imported vehicles, marking a dramatic shift in automotive trade policy. For dealers, this move means more than just headlines—it's the start of a market-wide ripple effect that will reshape how you buy, price, and sell cars in the months to come....
While much of the immediate media attention is focused on new-car pricing, the used vehicle market is already bracing for impact—and for savvy dealers, that means both challenges and opportunities.
New Vehicle Prices Are Rising—Fast
In March, consumer urgency led to a surge in new-car sales, with 1.59 million units sold—up 30% from February. Many buyers rushed in before price hikes kicked in, draining “pre-tariff” inventory and causing Market Days Supply to fall sharply.
As new vehicle prices inevitably rise, more shoppers will turn to used vehicles as a cost-saving alternative. That’s good news for independent and franchise dealers focused on pre-owned inventory—but it also means sourcing that inventory will become more competitive.
What Dealers Should Expect in the Used Market
- Tighter Inventory – Used vehicle supply is already dropping. In late March, it stood at 2.15 million units—down 1.2% from last year. Market Days Supply dropped to just 38 days.
- Stronger Demand – As new car affordability fades, demand for late-model used vehicles is expected to increase substantially.
- Faster Turnover – With tax season in full swing and tariffs tightening new supply, expect your best-priced units to move quickly.
- Auction Prices May Spike – As more dealers pivot to sourcing used inventory, expect higher competition at auctions and elevated MMR values.
Dealer Takeaways: How to Stay Ahead
- Appraise Strategically
Use tools like Laser Appraiser to cross-reference guidebooks and stay competitive without sacrificing profit. - Monitor Auction Trends
Monitor auction trends and watch for early signs of MMR inflation and shifting buying patterns. - Lean into Trade-Ins
Encourage customer trade-ins with fair offers—see how Laser Appraiser VIN Scanner simplifies trade-in appraisals. - Stock Up Smart
Focus on high-demand segments (like SUVs and crossovers) before prices trend upward into summer. - Expect Pricing Volatility
Margins will depend on timing and insight—your data and pricing tools are now more important than ever.
Final Word: Used Is Now the Front Line
The 25% tariff on imports has flipped the market script, and used inventory is becoming the hottest commodity. While consumers see higher sticker prices on new cars, wholesale buyers will feel the heat on the acquisition side.
If you're in the business of flipping used cars for profit, the next 90 days could be your most important quarter. Stay sharp, use the data, and make every VIN count.
