The Role of Tariffs on Used Cars — Print Story Feature

By Keith Meade

5:45 PM EDT March 22, 2025

Why Used Car Prices Are Driving Up: The Role of Tariffs

Morristown, Tenn. — Used car prices are hitting historic records with no relief in sight. The central part of the problem? The ongoing shortage of semiconductors. But there's also something less talked about: thelong-lasting effects of tariffs implemented by both the Trump and Biden administrations. As new tariffs are enacted in 2025, they are causing issues for shoppers nationwide.

 

The Tariff Problem

In 2018, the Trump administration imposed tariffs of 25% on steel and 10% on aluminum imports. However, these tariff increases are impacting global trade in unexpected ways. U.S. automakers, who rely on overseas suppliers, mainly from Europe and Asian countries, were hit hard for key components like semiconductors. The result? Manufacturing costs for new cars skyrocketed, pushing buyers into the used car market and increasing prices. In March 2025, the Trump administration rolled out even more tariffs

targeting automotive components to protect U.S. manufacturers. For many, that's only worsened the new and used car markets. "Tariffs definitely pushed up the demand—and prices—of used cars," said Wade Hammel, Used Car Manager at Morristown Ford. "When demand goes up, so do the prices at wholesale auctions for used cars." The U.S. Bureau of Labor Statistics said the average price of a used car as of early 2025 has skyrocketed to over $28,000 — more than double what it was just six years ago in 2019. This strains consumers, especially those relying on used cars as a more affordable option than new vehicles.

 

The Growing Challenge for Used Car Shoppers

Used cars have long been popular for first-time buyers and families trying to stretch budgets. But now, those affordable options are fading fast. The demand for used cars has surged in the past year, but so has the competition. Fewer cars are available and the higher costs for materials, driven by the tariffs, are only worsening the situation. "New cars are just too expensive now, so people are turning to used cars," said Travis Turner, General Sales Manager at Morristown Ford. "But because of the tariffs, we're seeing sales drop for new and used cars." The problem isn't just that used cars are getting pricier—new cars are becoming more challenging to get, too. Supply chain problems tied to the tariffs have caused long production delays. Between rising material costs and delays in getting parts, the wait time for new cars has only gotten longer. That means people hold on to their old cars for longer, putting even more pressure on the used car market.

 

The Bigger Economic Picture

The new tariffs in 2025 will likely have a lasting impact on the U.S. economy. While the goal is to protect American jobs and encourage domestic manufacturing, the side effects are causing more harm than good for many consumers. "If car sales keep going down, we could see many sales jobs at risk," Turner added. "Our priority is to keep our staff, but it's tough when business isn't as strong." For many buyers, the increasing cost of used cars is just one piece of a much larger puzzle. With inflation increasing, high interest rates and wages not keeping up, many people find it impossible to afford even a used car, let alone a new one.

 

What's Next?

The future of the used car market is uncertain. While some hope tariffs might be reduced or eliminated in the coming years, others worry the damage may already be done. Right now, the reality for car buyers is apparent: higher prices, longer waits for new cars and fewer affordable used vehicles. The effects of 2018's tariffs—and the new ones in 2025—continue to shape the market in ways many never anticipated. As the country works through these economic challenges, buyers may have fewer options and more financial strain.

 

Keith Meade is a Mass Communication Broadcasting student at Walters State Community College.