Used Car Prices Surge 29% as Inventory Drops to 43 Days

The U.S. used car market has been experiencing unprecedented supply shortages and soaring prices since the onset of the COVID-19 pandemic. By early May, dealers' inventory of used cars was sufficient to last only 43 days, marking the lowest level since 2021. Over the past two months, the average price of the top 50 best-selling used cars in the U.S. has been rising weekly, nearing 29,000 dollars. In contrast, the average price of new cars exceeds 48,000 dollars.

Several factors have contributed to these shifts in prices and inventory. Americans are increasingly inclined to retain their existing vehicles for longer periods, and new car prices are on the rise. Additionally, the tariff policies implemented by Donald Trump have exacerbated the upward pressure on prices. A senior economist from the automotive services company, Charlie Chesbrough, predicts that the rate of increase in used car prices will accelerate over the summer.

The tariff policies have had a significant impact on the automotive market, driving up the cost of imported vehicles and parts. This, in turn, has led to a surge in demand for used cars, as consumers seek more affordable alternatives. The limited supply of used cars, coupled with high demand, has resulted in a market where prices continue to climb. Dealers are finding it challenging to meet the demand, with inventory levels remaining low. The situation is expected to persist, with experts forecasting that the trend of rising used car prices will continue throughout the summer.