The Ripple Effects of a 2024 Trump Victory on Used Car Prices
Used car prices are influenced by various factors, including the vehicle’s make and model and the state of the economy. Presidential policies can also play a role, albeit indirectly. This could be the case if ex-President Donald Trump wins re-election this year against current President Joe Biden.
At present, used cars are still quite expensive. Research from Cox Automotive shows that the average listing price for a used vehicle was $25,328 in early February. Although this is lower than in the past couple of years, it remains significantly higher than in 2019, before the COVID-19 pandemic caused prices to spike.
If Trump returns to the White House, his policies could affect used car prices in several ways. Here’s how three of his anticipated policies might influence the cost of used cars:
**EV Regulations**
The electric vehicle (EV) industry saw significant support during the Biden administration, with billions of dollars allocated for EV charging infrastructure, expanded tax credits for EVs, and federal loans and subsidies to upgrade auto factories and retrain workers. If Trump is re-elected, he plans to roll back these laws and reduce or eliminate federal funding for the EV industry, according to a report from S&P Global. This could impact both gas-powered and electric vehicle sectors by benefiting the former and disadvantaging the latter. As a result, used EV sales might slow down, potentially lowering their prices. Conversely, fewer EV buyers could lead to increased demand and higher prices for gas-powered cars.
**Oil and Gas Drilling**
Trump has promised to boost oil and gas drilling in the U.S., including in remote areas of Alaska where Biden had canceled oil and gas leases. Increased oil and gas production in the U.S. could theoretically lower gasoline prices, which might lead to a rise in sales of gas-powered cars. This effect could mirror changes in EV regulations, with EV prices potentially decreasing at used-car lots while gas-powered car prices might increase.
**Tariffs**
During his presidency, Trump’s proposals to impose tariffs on foreign-made goods caused concern among auto executives, who feared they would need to raise prices due to more expensive parts sourced from overseas. Higher new car prices might push consumers towards buying used cars, thereby increasing their prices. The same scenario could unfold if Trump wins re-election and implements additional tariffs. In a recent interview with CNBC, he expressed strong support for tariffs.
These potential policy changes highlight how a Trump re-election could influence the used car market, affecting both EV and gas-powered vehicle prices in different ways.