Used Car Prices, Inventories Decline in March: Manheim Index

However, prices could rise as a result of newly announced auto tariffs by the Trump administration.

A used truck lot at a dealership in Chicago on July 11, 2023. Scott Olson/Getty Images

Wholesale used vehicle prices declined in March in the United States on both a monthly and annual basis, with inventories also low compared to a year back, according to automotive services company Cox Automotive.

The Manheim Used Vehicle Value Index, an indicator of pricing trends in the market, fell to 202.6 in March from February, a 0.2 percent decline from a year earlier, the company said in an April 7 statement.

“March is typically the strongest month for wholesale markets, so it’s normal to see values rise. However, this year’s price increases were not enough to meet seasonal expectations, which is why our Index shows a decline,” said Jeremy Robb, senior director of Economic and Industry Insights at Cox.

“While we initially thought appreciation trends peaked mid-month, we saw a reacceleration of weekly gains for wholesale values in the last week. Given the impact of tariffs, we may see stronger wholesale prices for the coming weeks as the market decides how to handle new tariffs at the border.”

The Trump administration’s 25 percent tariffs on auto imports took effect last month. The administration is also planning higher import duties on car parts in May.

President Donald Trump said that cars made in the United States will not be subject to tariffs.

“I think our automobile business will flourish like it’s never flourished before,” he said.

The tariffs are going to lead to cars being made in one location, he said. According to the Canadian Vehicle Manufacturers’ Association, auto parts may cross national borders as many as eight times before final assembly.

“Right now, a car would be made here, sent to Canada, sent to Mexico, sent all over the place,“ Trump said. ”It’s ridiculous.”

The administration predicts auto tariffs will generate more than $100 billion in annual revenue.

Tariffs have raised urgency among customers to buy new vehicles before prices go up, said Cox, adding that this urgency is likely to spill into the used vehicle market as well, affecting inventories.

Used vehicle inventory in late March was already down by 1.2 percent from a year back. Cox considers inventory to be a “key metric” to watch.

Meanwhile, the scheduled tariffs on auto parts may negatively affect service and reconditioning activities in the used vehicle market.

“The typical parts department at a dealership is a United Nations of items, parts from all over the world on the shelves—China, Mexico, Canada, Germany, South Korea, USA. No automaker or brand would be immune to major tariffs at the border,” said Skyler Chadwick, director of Product Marketing for Xtime, a Cox Automotive brand.

“Auto parts are the largest global business. And if auto part prices increase, dealers must manage how much of that added cost can be passed to consumers.”

Tariff Impact

An April 4 report from S&P Global said that the new auto tariffs could impact up to 45 percent of imported light-duty vehicles sold in the United States, including 23 percent coming from outside North America.

Light vehicle sales in the country could dip over the coming years, declining from 16 million units in 2024 to between 14.5 and 15 million units, the company said. S&P is predicting that tariffs will raise costs over the short term.

“Some automakers and suppliers will acknowledge the new reality with steps that include increasing US manufacturing. We will also see some short-term production disruption as automakers pull back production of low-volume, tariff-impacted vehicles,” the report said.

“However, these changes will take time and investment. There is no quick solution, and increasing manufacturing in the US, particularly based on an artificial economic condition, will be costly and is likely to create a more expensive manufacturing environment.

“Retaliatory actions are just beginning to surface; those actions will add another layer of complexity to the situation.”

This past week, Stellantis announced a pause in production at two assembly plants in Mexico and Canada, resulting in temporary layoffs at the company’s Michigan and Indiana plants.

Ascencione, an automotive technology manufacturer based in Reed City, Michigan, is seeing higher interest from companies considering domestic manufacturing opportunities.

The United Auto Workers (UAW), one of the largest labor unions in the United States, welcomed the tariffs.

“We applaud the Trump administration for stepping up to end the free trade disaster that has devastated working-class communities for decades,” UAW President Shawn Fein said.

“Ending the race to the bottom in the auto industry starts with fixing our broken trade deals, and the Trump administration has made history with today’s actions.”

Earlier this month, Trump declared a national emergency aimed at increasing America’s competitive edge.

A key provision is to reprioritize domestic manufacturing, according to an April 2 White House fact sheet.

“U.S. automakers face a variety of non-tariff barriers that impede access to the Japanese and Korean automotive markets, including non-acceptance of certain U.S. standards, duplicative testing and certification requirements, and transparency issues,” the fact sheet said.

“Due to these non-reciprocal practices, the U.S. automotive industry loses out on an additional $13.5 billion in annual exports to Japan and access to a larger import market share in Korea—all while the U.S. trade deficit with Korea more than tripled from 2019 to 2024.”