Are used car prices rising faster than new car?

Have you tried looking at a used McLaren lately? It's fricken ridiculous!

Saving Money on a Used Car Is Getting Harder

Used-car prices are rising faster than overall inflation after crossing the $30,000-mark again early this year

By Veronica Dagher and Christopher Otts, WSJ

Aug. 12, 2025 4:26 pm ET

Used car prices are rising faster than new car prices, with tight supplies pushing more people into the used-car market.

People looking for deals on used cars are having to pay up more.

Prices for preowned cars are rising faster than for new ones, with tight overall supplies pushing more people into the used-car market. The supply crunch started during the Covid-19 pandemic, and has persisted in part because of President Trump’s tariffs.

The details

Used-car and truck prices rose 0.5% in July from the previous month, and were up 4.8% from a year earlier, according to the latest inflation report published Tuesday. That is a faster rise than for new-vehicle prices, which were flat from the previous month and up 0.4% from a year earlier.

The overall consumer-price index was up 2.7% from a year earlier.

The average price of a 3-year-old used car rose above the $30,000 mark again earlier this year, and has trended upward since, according to a report by Ivan Drury, director of insights at Edmunds, an online car-shopping guide. It is now back near the record high set during the pandemic in 2022.

Still, used cars might look like a better deal today. Prices for previously owned models are down significantly compared with the sticker prices for those same cars when they were new, Drury said. He said the difference is especially stark for higher-end models.

“Sticker shock is real, but perspective matters,” he said. “For shoppers who would normally only consider new, this creates some smart buying opportunities.”

And deals could be especially good for electric vehicles.

Sales of used EVs are at an all-time high. With more preowned EVs entering the market this year and next, buyers should have more variety, said Jeremy Robb, senior director of economic and industry insights at Cox Automotive.

The context

The supply crunch of new cars during the pandemic means fewer used cars are becoming available today.

More people are also choosing to buy their leased cars instead of returning them, further reducing the supply of used vehicles.

The situation isn’t expected to ease much anytime soon.

Automakers have so far avoided across-the-board price hikes for new models despite Trump’s tariffs. But they are not expected to absorb multibillion-dollar hits to their bottom lines forever. Model year 2026 vehicles, going on sale soon, could see significant price increases.

Price hikes from tariffs could lead to a surge in demand for used vehicles, further tightening supplies and driving up prices, said Jonathan Smoke, chief economist at Cox Automotive.

Rising prices for both new and used cars are expected to damp overall demand for this year, he said.