A Used‑Car Frenzy Is Supercharging Carvana, AutoNation Stocks

Used car prices are revving back into high gear – and dealership stocks are catching a tailwind. According to Cox Automotive, the Manheim Index, which tracks wholesale used vehicle prices, jumped 1.6% in June, marking a 6.3% year-over-year surge – the steepest increase since August 2022.

The reason? A one-two punch of Trump-era auto tariffs and tightening new car supply is throwing the market into overdrive.

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Tariffs Fuel The Turbo

President Donald Trump's proposed 25% tariffs on imported vehicles and parts have spooked automakers into pulling guidance and scaling back production plans. That uncertainty has created a vacuum on dealership lots – sending buyers scrambling for pre-owned vehicles instead.

This isn't just a pricing story – it's a margin story. With new vehicle inventory shrinking, used car dealers like Carvana Co CVNA and AutoNation Inc AN are enjoying higher pricing power and fatter per-unit profits.

Cox Automotive says used vehicle inventory has dropped to a 43-day supply – well below normal levels. Translation? Dealers are in the driver's seat.

Dealers Make Their Move

Carvana and AutoNation, long-time leaders in the retail auto space, are particularly well-positioned to benefit from this trend. Both have invested heavily in online platforms, omnichannel sales, and used vehicle sourcing, allowing them to navigate tight supply conditions better than peers.

While the broader auto sector remains rattled by tariff volatility, these dealers are thriving.

Investors are starting to take notice: Carvana shares are up more than 74% year-to-date, and AutoNation has rallied nearly 26%. With margins expanding and the pricing environment favorable, these stocks may still have gas in the tank.

While tariffs cloud the new car horizon, used car demand is blazing ahead – and Carvana and AutoNation are riding shotgun.

For investors looking to play the tariff turmoil, these dealership stocks offer a direct, margin-rich route into the auto market's most resilient segment.

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