Prices of used vehicles in the United States are rising once again, recording their largest annual increase in nearly three years, according to fresh auction data.
The Manheim Used Vehicle Value Index, a key measure of wholesale used car prices, climbed 1.6% in June compared to May (seasonally adjusted), and rose 6.3% year-on-year, marking the highest annual rise since August 2022. The index now stands at 208.5, its highest level since October 2023, and has been trending upward for over a year.
Analysts attribute the rise to ongoing market volatility driven by former President Donald Trump’s 25% tariff on imported cars, which caused a temporary spike in new vehicle sales earlier in the year as consumers rushed to avoid anticipated price hikes. However, sales slumped in May and June, affecting supply chains and trickling down into the used car market.
Jeremy Robb, senior director at Cox Automotive, which compiles the index, told Reuters that the market has been particularly volatile in the second quarter due to tariff-related disruptions in the new vehicle market, which indirectly affected used vehicle pricing and availability.
He noted that used vehicle supply is also shrinking as fewer cars come off lease, while retail demand remains hotter than in previous years—two forces that support elevated prices into the latter half of 2025.
The Federal Reserve, which closely monitors the Manheim Index, has historically used it as an early inflation indicator. The index’s sharp rise in 2020 was seen as a precursor to the broader inflation wave that peaked in 2022 when U.S. Consumer Price Index inflation exceeded 9%, the highest in four decades.
Fed Governor Christopher Waller, who in 2021 urged caution against ignoring such data, is now reportedly on Trump’s shortlist to replace Jerome Powell as Fed Chair. However, he has shifted tone, expressing concern that the current round of tariffs might dampen demand more than drive sustained inflation.
Despite predictions of easing inflation, the Fed remains cautious, with several officials reluctant to reduce interest rates until confident that inflationary risks have fully subsided.