The average price of a used car rose $100 in March according to CARFAX’s Used Car Index. This comes as a combination of seasonal trends and incoming tariffs drove sales to more than double what they were a year ago.
“We expect this surge in car prices and sales to continue,” said Srinidhi Melkote, Vice President of Business Analytics at CARFAX. “The strong new car demand has pushed new car prices up and supply down, leading some consumers to turn to used cars for a more affordable option. This shift in consumer behavior will drive up used car prices as well, creating a cascading effect across the market.”
This surge in used card sales has indeed lowered inventory across the country. According to Cox Automotive, the total supply of used vehicles available at the end of March was 2.14 million units, down from 2.18 million in February. As car availability tightens across the board, prices will continue to increase to compensate.
Price Fluctuations
Some bigger price increases were already seen in March as the average cost of used Vans and Minivans was up roughly $800, now sitting at $22,331. This is followed close behind by a $500 increase for Luxury SUVs and a $400 price increase for non-luxury SUVs. The average list price for those popular segments was $33,552 and $23,446 respectively. Hybrids and EVs were also up $270 month over month with an average price of $29,627.
These price changes are a reversal of fortunes from the beginning of the year as prices were slowly starting to approach pre-pandemic levels. In fact, the only used car segment that did not see a price increase in March were Luxury Cars, who saw a small price decrease of $50.
Regional Changes
The CARFAX Used Car Index for March also included regional data for the first time, identifying some pricing changes specific to parts of the country.
Luxury Cars had perhaps the most interesting variance as their price dropped 2.3 percent month over month in the Northeast but increased 2.6 percent in the Southwest. Showing that while national trends are important, they aren’t always applicable to every region.
Still, prices were still mostly up across the board in all regions. Used Vans and Minivans had a 3.8 percent increase in the Mid-Atlantic and 3.7 percent rise in the Midwest, the largest regional price increase in any available segment. They also saw a 2.8 percent increase in the Northeast and a 3.2 percent increase in the Plains (OK, ND, SD, NE, KS, ID, WY, MT) region.
Luxury SUVs didn’t fare much better as they were up 3.2 percent in the Plains, 2.4 percent in the South and 2.3 percent in the Southeast. The non-luxury segment also saw a price increase of 2 percent in the south and 2.4 percent in the West.
“We’re at the front end of a major shift,” said CARFAX Editor-in-Chief Patrick Olsen. “As demand builds and costs continue climbing, buyers should be more strategic to stay ahead in an increasingly competitive market.”
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