Used Car Values and EVs Are Smashing Through Tariff Chaos—Here's Where to Invest Now

The used-car market isn't just surviving—it's thriving. While tariffs on new vehicles send shockwaves through the auto industry, investors are missing a golden opportunity in two unstoppable trends: luxury SUVs and electric vehicles (EVs). The Manheim Used Vehicle Value Index (MUVVI) just hit 208.5, up 6.3% year-over-year, and it's the EV and luxury segments driving this surge. This isn't a blip—it's a structural shift. Here's why you should buy into this now, and which stocks to target.

The Numbers Are Unstoppable: Luxury, SUVs, and EVs Are the New Black

The luxury segment is leading the charge, with prices up 8.8% year-over-year in June—the fifth straight month of dominance. SUVs are close behind at 6%, but the real fireworks are in EVs, which spiked 12.1% as used-car buyers snap up these vehicles ahead of expiring tax credits. This isn't a coincidence.

Why now?
- Tariffs are killing new-car sales: June's new-vehicle sales fell 4.2% year-over-year as buyers balk at rising costs.
- Supply is tight: Off-lease inventory is drying up, and trade-ins aren't keeping pace. Luxury SUVs, in particular, are scarce—so prices keep climbing.
- EV demand is roaring back: After a dip in 2023-24, used-EV values are surging as buyers bet on tax credits expiring by Q3 2025. Even luxury EV SUVs are flying off lots.

This Isn't a Bubble—It's a Structural Shift

The data is clear: the used-car market is normalizing after pandemic chaos. Retail days' supply stabilized at 45 days in June, and Cox Automotive expects the MUVVI to end 2025 1.8% higher than last year. But here's the kicker: the EV segment isn't just catching up—it's lapping the field.

The Playbook: Buy Used-Car Retailers and EV Infrastructure Now

This isn't about flipping cars—it's about owning the distribution channels and technological edge that will dominate this market.

1. CarMax (KMX): America's largest used-car retailer is a must-buy. Its Q2 sales data should reflect the luxury/SUV boom. With 45 stores in high-demand markets, CarMax is perfectly positioned to capitalize on rising prices and EV demand.
   

2. Cox Automotive (CACC): The parent company behind Manheim is the backbone of this industry. Its data platforms and auction networks give it unmatched insight into supply trends. If luxury and EV values keep rising, Cox's margins will expand.

3. EV-focused platforms: Look to companies like Vroom (VRM) or Shift (GEAR), which are pivoting to EV specialization. Used-EV demand is outpacing supply, and players with inventory and tech to authenticate these vehicles will win.

The Risk? Sure, But the Upside Is Massive

Yes, tariffs could ease, and some of the 12% EV gains might flatten. But here's the deal: luxury buyers aren't price-sensitive, and EV tax credits are a ticking clock. Even if growth moderates, the supply-demand imbalance means values won't crash. This is a multi-year trend.

Final Call: Load Up on Used-Car Plays—And Bet on EVs

The Manheim Index isn't just a number—it's a roadmap. Luxury SUVs and EVs are the darlings of this market, and the companies enabling their trade will profit. Buy CarMax, Cox, and EV specialists now. This isn't a guess—it's a no-brainer in a market desperate for resilience.

Action Plan:
- Aggressively overweight used-car retailers in your portfolio.
- Dollar-cost average into EV-focused platforms as volatility hits.
- Avoid new-car manufacturers until tariffs resolve—this isn't their moment.

The used-car boom isn't ending here—it's just getting started. Don't be left behind.

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Jim's bottom line: This is a buy now, hold forever scenario. These stocks aren't just surviving tariffs—they're dominating.