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US used car prices surge as tariffs drive market volatility, Auto News, ET Auto

US used car prices surge as tariffs drive market volatility, Auto News, ET Auto

US used car prices surge as tariffs drive market volatility, Auto News, ET Auto
A key index tracking US wholesale used vehicle prices recorded its biggest annual jump in nearly three years last month, signalling renewed inflationary pressures.

A gauge of U.S. used vehicle prices sold at wholesale auctions that proved predictive ahead of the inflation surge following the COVID pandemic is climbing again, last month notching its largest annual increase in nearly three years.

The rise comes amid ongoing vehicle price and sales volatility connected to auto tariffs imposed by President Donald Trump.

The Manheim Used Vehicle Value Index rose 1.6% in June from May on a seasonally adjusted basis and surged 6.3% from a year earlier, the largest year-over-year increase since August 2022, according to data released on Tuesday. At 208.5, the index has been trending upward for a year and is now at its highest since October 2023.

“Wholesale appreciation trends have been more volatile over Q2 as tariffs really impacted new sales and supply, which impacted the used marketplace as well,” said Jeremy Robb, senior director of economic and industry insights at Cox Automotivewhich provides the index.

Price pressures typically ease in the second half of the year, but Robb said retail vehicle sales remain “a bit hotter than prior years” and the supply of vehicles coming off lease into the used-car market has been trending downward, “two factors which should be fairly supportive of higher values as we move onward.”

Trump’s 25% tariff on imported autos prompted a surge in new vehicle-buying during the early spring as consumers sought to front-run anticipated price increases from the levies. Sales fell off substantially in May and dropped again in June.

Overall inflation has so far defied the predictions of most economists, but many Federal Reserve officials remain convinced some sort of price surge will follow and are hesitant to cut interest rates until satisfied that risk has passed.

Manheim’s index in recent years has caught the eye of private economists and some Fed officials who saw it as among the early indicators auguring for a more substantial, and long-lasting, bout of inflation as the economy emerged from the pandemic in 2021 and 2022.

The index began a sharp climb in late 2020 that persisted for more than a year. By mid-2022, overall U.S. inflation as measured by the Consumer Price Index had topped 9% and was the highest since the 1980s.

Fed Governor Christopher Waller in the fall of 2021 warned against “selectively ignoring data series – be it used car prices, food and energy prices or household surveys of inflation expectations. All of these series convey important information about the evolution of inflation, and one should exhibit caution in dismissing data as outliers.”

At the time, Waller was building the case for interest rate hikes to combat still-building inflation that some of his colleagues considered “transitory.”

Now, though, Waller, who is viewed to be among those Trump is considering as a successor to Fed Chair Jerome Powell, appears more concerned the tariff increases will hurt demand rather than stoke another lasting bout of inflation. Waller said recently he was open to cutting rates as early as the Fed’s meeting later in July.

(Reporting by Dan Burns; Editing by Chris Reese)

  • Published On Jul 9, 2025 at 09:50 AM IST

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