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Inflated used car prices as President Donald Trump’s tariffs “leave the station” could be a boon for dealer stocks, according to Morgan Stanley’s Adam Jonas. The analyst cited data from the Manheim Used Vehicle Value Index that showed prices jumped nearly 2% month-over-month in June and more than 6% year-over-year. The firm tied part of the reason for the sharp jump in prices to the effect of tariffs on sales and tight supply for both new and used cars. Other catalysts for the increase, Jonas added, were consumers opting to front load and make purchases ahead of the full implementation of tariffs, and to also “pre-buy” ahead of the removal of an electric vehicle tax credit in September. Jonas also said policy uncertainty could keep prices elevated. Trump has fanned the flames of his trade war in recent days as his tariff letters hit 14 global trading partners, including Japan and South Korea. The president last month doubled tariffs on steel and aluminum to 50%, which could have stiff ramifications for domestic carmakers. But there are still benefits to be had, according to Jonas, especially car dealers that sell both used and new cars. The analyst recommended a handful of overweight-rated stocks to play the trend, including CarMax and Carvana . One of the under the radar picks from Jonas on the list is Group 1 Automotive . Shares have climbed nearly 14% in 2025. The company sells both new and used cars, and also operates collision centers in the U.S. and United Kingdom. Analysts polled by FactSet are split on the stock, with 50% of those surveyed maintaining a hold rating, and the other half rating it a buy or strong buy. GPI YTD mountain Group 1 Automotive stock in 2025. Carvana has surged more than 73% so far in 2025. Peer CarMax has lagged, however, with a decline of more than 18%. CarMax shares came under pressure in April after the company suspended the timeframes associated with its long-term growth targets due to economic uncertainities. But the stock has climbed more than 4% since releasing better-than-expected fiscal first-quarter results in late June. Analysts remain optimistic on both stocks, with about 62% of analysts surveyed by FactSet have a buy rating on CarMax stock and 55% buy rated on Carvana.
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