Used Car Prices Spike, New Car Prices Don't (Yet)

Issue #114

Happy Tuesday! 

Did you know the Ford Probe was launched on May 13, 1988, as an intended replacement for the Ford Mustang?

Of course, it didn’t work, but here’s a bit of its fascinating history. 

Market News

• Despite tariffs, not all new car prices are increasing just yet. Here’s why that’s good and bad. 

• Toyota teases the new generation of its best-selling vehicle. Here it is. 

• Tesla sends workers home as it idles production on this vehicle. 

• Jeep says it has created its own “Defender.” It’s a big statement. Does it deliver? 

• Nissan’s job cuts could reach this surprising amount soon. 

• America could save the Mercedes AMG V8. Here’s why! 

• Finally, a cheap(er) version for us RAM 1500 lovers. Here’s what the Ram Express offers you. 

• Mitsubishi plans to increase prices, but can’t risk losing market share. 

• Colorado legalizes kei cars, but not yet. 

• Ford’s employee pricing deal has worked wonders. So, how long will it last?

Safety and Recalls

• Hyundai recalls the Palisade over fire risks. 

• Polestar has yet another rearview camera recall. This time, it involves more units. 

• Volkswagen recalls many VW and Audi cars over fire risk. 

Car Culture

• Could car surveillance kill the automotive enthusiast? 

• Kia’s EV truck for the US is promising. Here’s what Kia has said about it. 

• Zombie cars are a thing, and they’re roaming our roads. 

• Alfa Romeo, out of all brands, has received three “Best Car” awards for these models. 

• This single townhouse in Texas has had three cars crash into it. 

• This is one of the most valuable and unknown car collections out there. 

• BMW SUVs are getting chunky, and that’s not great. 

• These cars were all show and no go. But we still loved them. 

• This 1972 Beetle has 104 miles! 

• The Canton Classic Car Museum holds valuable automotive history. Check out part of its fascinating collection. 

Video Of The Week

The new Expedition: can it beat its toughest competition?

Power On The Go

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That’s why I joined Bluetti’s affiliate program. Their lineup of solar generators is incredibly solid—and they’ve got models for everything from emergency home backup to road trip charging stations.

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Yes, that’s an affiliate link. No, it doesn’t cost you anything extra. But every click helps support this newsletter and keeps the content coming. Win-win.

In The Know

Used car prices are spiking, here’s why. 

Have you been browsing used cars lately? You’re not alone.

Now more than ever, people are looking for used cars. If you have, you might have seen a price increase, even before tariffs.

When these tariffs came into effect, many knew that the cost of new cars would increase. However, people also wondered how used vehicles would be affected.

After all, everything from engines to transmissions brought in from abroad now costs an extra 25%, and that ripple is hitting the used car market hard.

When new cars get more expensive—because automakers have to pay more for the parts they’re importing—people thinking about buying new might prefer used cars instead.

Ford, for instance, estimates it could take a $1.5 billion hit this year thanks to the tariffs, and expects new vehicle prices to inch up 1–1.5%. 

Toyota is on the same boat, estimating a $1.3 billion hit and similar percentages. We wrote about this topic here. 

This increase in price may not sound huge, but that kind of increase across the board pushes a lot of buyers into the used market, which, again, drives prices up there too. 

That shift in demand (as this article explains) creates more competition for used vehicles, and boom: prices go up.

The latest Manheim Used Vehicle Value Index shows nearly a 5% jump year-over-year, and almost 3% from March to April. That’s the most significant leap since 2023.

Dealerships are feeling the heat, too. Even massive networks that move nearly $19 million worth of used inventory daily are bracing for tighter margins and fewer trade-ins. 

That’s where the key problem lies. A $2,000 increase in a luxury used car is nowhere near as impactful as the same $2,000 in a compact vehicle. So, if people couldn’t afford a car before, now it could be nearly impossible. 

The problem is that uncertainty is still rampant, as this article explains.

The benefit for larger dealerships is that they will be able to compensate for some of the increase in prices by having many cars. 

The small used car lots will suffer greatly.

As this article explains, a few of these smaller dealerships have already reported that customers are walking away when they see the sticker prices, assuming they’re being gouged, when in reality, it’s just the downstream effect of the tariffs. 

Supply chain costs go up, new cars get pricier, used car demand explodes, and suddenly that decade-old SUV with 90K miles sells for more than it did last year.

Now, there’s no denying that the used car market will feel the impact in the short run, but we have to remember that these tariffs are intended to benefit the US in the long run. 

Automakers are clearly trying to move plants to the US. But besides that, the positive impact remains to be seen, as we have no idea what will happen. 

This article raises an interesting discussion on US automotive production in the short run.

So if you’re in the market, brace yourself.

And, if you’re looking for a new car for those new drivers in your family, we’ve provided the list for the 10 best used cars for new drivers. Here it is!