Is Now the Best Time to Buy a Used Car?

How Today’s Political Forces Are Shaping the Market

Prices have been falling, leading buyers and sellers to question whether the time is ripe to upgrade. Find out whether now is the best time to sell your car and upgrade.

For years following the COVID pandemic, new and used car prices remained unaffordably high. Now, that’s finally changing. Find out how today’s political forces are shaping the used car market to determine whether it’s time to sell your car and upgrade.

New Climate Change Legislation

One of the most talked-about political forces shaping the automotive market, in general, is climate change legislation. The Biden administration passed some of the strictest environmental protection regulations in American history, which has impacted both new and used car sales.

As automakers transition to clean energy in response to new industry standards, more vehicles are being introduced into dealership showrooms, which is one of several factors helping to bring down the cost of new cars. As new car prices drop, used car prices follow suit.

Federal tax benefits are also available to help consumers buy used EVs and hybrid vehicles. For 2024, buyers can expect a tax break of up to $4,000 or 30% of what they paid for the car. For those who want to go green, now’s the time to take advantage of federal and state tax breaks.

Possibility of Trade Tariffs

The possibility that Donald Trump will impose strict new tariffs has economists speculating about potential impacts across many sectors of the economy. The automotive industry is no exception.

If the incoming Trump administration imposes more significant tariffs on foreign-made cars, the most likely scenario is that it will drive up the cost of new vehicles. As new vehicle prices rise, more drivers could turn to the used car market again instead. Increased demand would then drive up prices.

What that means is right now might be a good time to purchase a used car, but it might not be the best time to sell your car. Sellers may be better off taking a wait-and-see approach if they can. If trade tariffs strongly impact the automotive market, they may get more money.

What Will the Future Hold?

In March 2024, the Environmental Protection Agency announced new pollution standards that will apply to all but heavy-duty vehicles starting in 2027.

In some places, such as California, regulations and clean energy targets are even stricter. The state plans to ban the sale of new gas-burning cars by 2035. The influx of new electric vehicles into the market could further reduce the cost of used cars in CA and beyond.

The other side of the coin is that newer cars with more expensive technology come with higher price tags, even when they are a few years old. EVs and hybrids almost always cost more than gas-only cars because the technology is new, and that trend is unlikely to disappear overnight.

As you can see, the political forces impacting the automotive industry and used car pricing, in particular, are complicated. The bottom line is that if you need a new car, now is a fine time to buy. Prices are down, and it’s unclear whether that trend will continue or reverse.