Used Vehicle Prices Fall in May: Manheim Index

Wholesale used vehicle prices declined in May from the previous month, with sales prices at the retail level declining as well, automotive services company Cox Automotive said in a June 6 statement.

The Manheim Used Vehicle Value Index, which measures pricing trends in the sector, fell by 1.4 percent on a monthly basis in May. Jeremy Robb, senior director of Economic and Industry Insights at the company, said that while wholesale price growth was “remarkably strong” in April, “the market gave some of that strength back in May.”

Despite the May decline, wholesale used vehicle prices remain “well above” last year’s levels, he said, adding that weekly wholesale price depreciation was observed to be stronger in the middle of May but slowed down in the last week of the month.

“While the market continues to digest the impact of tariffs, we could see a bit higher levels of wholesale depreciation over the summer,” Robb said.

“However, lower inventory levels may counterbalance those more aggressive depreciation trends in the coming months.”

At the retail level, used vehicle sales in May were down by 3 percent from April, with the average retail listing price dropping by 0.5 percent over four weeks.

The May decline in prices comes amid the Trump administration’s auto tariffs, which were expected to trigger a run in the prices of vehicles.

In April, a 25 percent tariff on auto imports came into effect. Later in the month, President Donald Trump signed an executive order providing relief to automakers by preventing overlapping duties from being charged on the same vehicle.

Following the imposition of tariffs, wholesale used vehicle prices jumped by 2.7 percent in April from the previous month. But the 1.4 percent dip in May has negated much of this price increase.

New–Used Price Gap

According to a May 22 post by car shopping company Edmunds, the price gap between new and near-new vehicles shrank in the first quarter of the year.

The gap had hovered at about the $17,000 level for some time. But in the first quarter of 2025, this stability began showing “signs of strain,” with the price gap between new and three-year-old vehicles dropping to $16,970. This was the first time since the third quarter of 2022 that the gap fell below $17,000.

“This change signals the early stages of renewed pricing pressure in the used market,” Edmunds said in the post.

“Price stability is now poised to experience more significant turbulence in the quarters ahead as both new and used market fundamentals evolve.

“The biggest culprits for the imminent changes are a diminished supply of off-lease vehicles returning to the market in 2025, combined with regionally targeted tariffs potentially driving scarcity of select new models. These factors could trigger a cascading effect of higher used prices.”

The Trump administration’s tariff measures have attracted contrasting views from the automotive industry.

The United Auto Workers welcomed the tariffs in a March 26 statement, calling the measure a step in the right direction.

“With these tariffs, thousands of good-paying blue-collar auto jobs could be brought back to working-class communities across the United States within a matter of months, simply by adding additional shifts or lines in a number of underutilized auto plants,” it said.

The National Automobile Dealers Association opposed the tariffs in a March 26 statement, arguing that they would raise prices and “put the purchase of a new car out of reach for an increasing number of American consumers.”

The Trump administration has taken measures to lighten the burden on domestic manufacturers. In May, a 25 percent tariff on imported auto parts took effect. However, parts that meet the U.S.–Mexico–Canada Agreement requirements were exempted in a bid to maintain the deeply interconnected auto supply chain in North America.

Meanwhile, the administration’s policies are starting to show positive effects, with the U.S. trade deficit dropping sharply in April, driven by a 16 percent fall in imports. One of the largest import declines was in automotive vehicles, parts, and engines.