Used Car Dealers NAICS 441120

Jul 29, 2025 - More Consumers Plan To Buy a Car This Year, Citing Tariffs

• The seesawing automobile market continues with consumer intent to buy a car shifting almost as often as the 25% US tariffs on imported automobiles. Tariffs are driving up auto prices (Ford, Subaru, and Toyota have all boosted prices, citing tariffs) and a survey from Santander Holdings USA shows a renewed rush to buy now before prices climb higher. About 55% of consumers will buy a new car in the next year (up from 47% in Q1 2025). One in five US households sped up big purchases in Q2, with 41% of those transactions being a car. Half of consumers are also likely to take out an auto loan, while 42% will buy a used car, illustrating how tariffs have downstream effects. After a surge of auto buying in the spring, more consumers (42%) expect the situation to be long-term and will buy a car in the next three months.
• The Manheim Used Vehicle Index (MUVI), which tracks used car wholesale prices at auction, rose to its highest level in three years. The index rose 1.6% in June over the previous month, and was up 6.3% year over year, as tariff-driven price hikes and related supply shortages on new cars ripple down into the used vehicle market. Price appreciation on new cars and a surge of pre-tariff car purchases is translating into used car supply shortages as consumers keep cars longer and don’t trade in three-year leases after the term. Leasing trade-ins are a prime source of used car supply - when consumers choose to keep their leased vehicle instead, used car inventory plummets. In addition, MUVI has become something of an inflation indicator as it performed similarly in predicting inflation after the pandemic. Economists have increasingly looked to MUVI to gauge the likelihood of inflation.

• Used car prices have hit their highest levels in three years and on average are only $17,000 cheaper than a new car, the narrowest gap since 2022, according to a recent study by online automotive resource Edmunds. The report shows that the average price for a three-year old or less used car has risen to $30,000. In addition, the average age of trade-in vehicles has risen from 7.3 years to 7.6 years in the span of only a year, indicating consumers are driving their cars for longer. The price bumps go back to pandemic-era semiconductor shortages that shrunk new car inventories, which eventually became today’s shortage of used car inventory. Prices for used vehicles are also soaring due to a rush from consumers to buy used cars to offset new car price increases resulting from the Trump administration’s tariffs on foreign automobiles.
• Every year used car dealers add about $11.8 billion in hidden fees on 26 million used automobiles sold, according to a study of sales transactions by used car app CarPilot. The fees are more common than most car buyers know, with CarPilot finding 71% of used car shoppers encounter the hidden fees on US auto brands versus 64% on foreign autos. Some fees are legitimate, while others CarPilot ranks as either illegitimate (such as wheel etching, wheel locks, warranties, exterior paint protection, etc.) or excessive (licensing, e-filing fees, and title and related documentation fees). Customers can avoid being blindsided by fees if they contact the dealer beforehand and settle on a pre-arranged price or research the average fees in the states they live in. Some states including California and New York require clear and itemized disclosure of added fees, a practice that isn’t uniform nationwide.