The Wall Street Journal (WSJ) reported on May 26 that the Trump administration’s tariff policies are impacting the used car market, leading to inventory shortages and rising prices. As consumers flock to the used car market to avoid skyrocketing new car prices, used car prices are also climbing rapidly, putting financial strain on buyers.
Citing data from automotive research firm Cox Automotive, WSJ noted that used car inventory held by dealers in early May was enough for just 43 days, the lowest for the same period since the pandemic-hit 2021.
Typically, used car inventories increase after mid-April, but recent supply chain disruptions have left inventories at their lowest since 2021, when prices surged due to similar constraints.

With limited inventory, used car prices are rising, and consumers are finding it harder to locate their desired vehicles. According to Cox Automotive, the average price of the 50 best-selling used car models in the U.S. has been rising for two months, approaching $29,000. New car prices, meanwhile, are nearing $49,000, close to $50,000.
Automotive valuation firm Kelley Blue Book explained, “Generally, when new car prices rise, used car prices follow suit.”
A Korean-American resident of Fullerton, Mr. Park, shared, “I initially wanted to buy a low-priced new car for my child starting college, but even the cheapest new cars seem to exceed $30,000. I’m now looking at used cars under $20,000, but popular Korean and Japanese models are scarce, and their prices have risen significantly, leaving me hesitant.”
While auto tariffs don’t directly affect used car prices, they influence the market indirectly through rising new car prices and shifting consumer demand.
As new car supplies dwindle and prices climb, consumers are flooding the used car market, causing many dealerships to face inventory shortages.
Glen Gotfried, a sales manager at a car dealership near Detroit in Ann Arbor, told WSJ, “The supply of used cars is constrained, especially for popular brands in good condition, where supply is even tighter.”

The Trump administration implemented a 25% tariff on foreign-made vehicles on April 3, followed by a 25% tariff on auto parts like engines starting May 3.
In response to industry pushback, tariffs on parts equivalent to 15% of the price of U.S.-assembled vehicles have been temporarily waived for one year until April 30, 2026.
Ford has already raised prices on three vehicle models produced in Mexico. Volkswagen and Subaru have also announced price hikes for some new models.
A recent Citibank report estimated that vehicle production in North America fell 8% year-over-year in April, driven by reduced output at Mexican factories.
Industry experts have warned that the Trump administration’s tariffs on foreign-made vehicles could increase prices not only for imported cars but also for American-brand new and used vehicles.

By Hwan-Dong Cho