- Car dealers paid less for used cars to restock their lots in May
- A wholesale price drop means a retail price drop may be coming
America’s car dealers paid less for used cars at auction in May than they did in April.
Car dealers get the used cars they sell from two sources: trade-ins and buying them at auction. We track future used car prices by watching auction prices.
A price change at auction lots usually becomes a price change for car shoppers in about six to eight weeks.
Tariff Impacts are Probably Keeping Buyers Away
- New car tariffs are slowly raising the prices of both new and used cars
- Sales are beginning to slow after an early tariff buying binge
Both new and used vehicles have grown more expensive in recent months as President Trump’s sweeping tariff scheme has taken hold.
But higher prices are starting to keep buyers away from sales lots. That trend hit new cars first, but is starting to impact used car shoppers, too.
Related: Is Now the Time to Buy, Sell, or Trade-in a Car?
That news comes from Kelley Blue Book’s parent company, Cox Automotive, which also owns car auction giant Manheim, where car dealers go to buy used cars they later sell.
The Manheim Used Vehicle Value Index tracks the prices they pay. Adjusted for normal seasonal fluctuations, it fell 1.4% in April. Wholesale prices are still 4% higher than they were a year ago. But they’re falling, which means dealers can charge less to buyers and still make a profit.
The Conference Board Consumer Confidence Index improved in May, but Americans don’t expect that to last.
Consumer confidence was down 3.3% year over year. Plans to purchase a vehicle in the next six months improved to the highest level since December but were still slightly lower year over year.