Recently, used car prices have been trending upward in the United States. This is analyzed to be due to dealers purchasing vehicles in anticipation of increased demand for used cars after the Donald Trump administration imposed a 25% tariff on all imported cars starting from the 2nd. Major automakers have not yet raised the prices of new cars, but there are prospects that car prices in the U.S. could rise significantly in the second half of the year as tariffs may be reflected in sales prices after June.
According to the automobile industry on the 29th, the Mannheim used car price index published by Cox Automotive, an automotive market analysis company in the U.S., recorded 207.1 in mid-month. This figure is the highest in 1 year and 6 months since 209.4 in October 2023. The Mannheim index is a price indicator calculated by aggregating more than 5 million used car transactions each month, using January 1997 price at 100 as a base.
Cox Automotive analyzed that the increase in used car prices has been more substantial compared to previous years due to the Trump administration's tariff imposition on imported cars. Jeremy Robb, a senior executive at Cox Automotive, noted, “The wholesale automotive market showed significant changes at the end of last month when the tariff measure took effect and the beginning of this month,” and added, “The increase in demand for used cars prompted dealers to replenish their inventories, leading to a rise in the Mannheim index.”
There are many forecasts in the automobile industry that used car prices in the U.S. could rise considerably as the year progresses into the second half. Although several automakers have not yet reflected the tariffs, if the tariff imposition continues, they will ultimately have no choice but to pass on the costs.
In the U.S. automobile market, used car prices often rise when new car prices increase or supply becomes difficult. The Mannheim index dipped below 150 in early 2020, but during the COVID-19 pandemic, new car supply was constrained due to semiconductor shortages, leading it to exceed 250 in 2022. Consumers turned to purchasing used cars instead of awaiting delayed new cars with rising prices, thereby driving up used car prices.
There are expectations that it will be decided around June whether the import car tariffs will be reflected in new car prices. Large automakers like Hyundai Motor and Kia currently have inventory vehicles so they can withstand raising new car prices immediately, but this is because their stockpiled inventory is only for about 3 months.
Lee Seung-joo, head of the finance division at Hyundai Motor, said during a conference call on the first-quarter earnings held on the 24th, “We will freeze the sales prices in the U.S. market until June 2,” interpreted as a statement that they will consider price increases depending on the situation thereafter.
An industry official said, “If automakers start to reflect the tariffs, a ‘car purchase crisis’ could occur, where both new and used car prices rise sharply,” adding, “As the automotive-related items hold a high proportion in the U.S. price index, it will become difficult for the Trump administration to maintain its tariff policy on imported cars.”