**Used Vehicle Prices Ease from April Peak Amid Tariff Concerns**

In a shift from recent trends, used vehicle prices saw a decline last month from their April highs as consumers rushed to purchase vehicles amidst tariff concerns. The Manheim Used Vehicle Value Index, which monitors prices at U.S. wholesale auctions, recorded a 1.5% decrease from April to May. However, prices still remain 4% higher than the same period last year.

Jeremy Robb, senior director of economic and industry insights at Cox Automotive, remarked, "Wholesale appreciation trends were remarkably strong in April, but the market gave some of that strength back in May, though values remain well above last year's levels." The Manheim Index's recent high was the highest since October 2023.

While retail prices for consumers are generally influenced by changes in wholesale prices, they have not fallen as sharply in recent years. This disparity is a notable trend, especially amid President Donald Trump's 25% tariffs on new imported vehicles and many parts. Although these tariffs do not directly affect used car sales, they do influence new vehicle prices, production, and consequently, the used car market.

Despite some softening in demand, the market for used vehicles remains relatively strong. Inventory levels are at 2.2 million, which is low compared to historical norms. This scenario is a result of consumers holding onto their vehicles longer and the automotive industry's production challenges during the coronavirus pandemic and ongoing global supply chain shortages.

According to Cox Automotive, retail used vehicle sales in May were down 3% compared to April but saw a 4% increase year-over-year. The recent stabilization in used vehicle prices, following years of significant fluctuations, indicates a more settled market as 2024 progresses.