Potential market turbulence has made car shoppers more cautious in recent months, said some Long Island dealers in the wake of a new report that shows higher average costs for lightly used cars.

Between tariffs and higher interest rates, people are looking to save money, sales managers interviewed by Newsday said. 

"Everybody is just nervous right now," said Tommy Costa, general sales manager at King O'Rourke Cadillac in Smithtown. 

On a national level, 3-year-old used cars are costing more money, an early sign of pricing pressure in a segment usually known for its affordability, according to a new report from auto data provider, even as the average cost for new cars holds steady.

The average cost for a 3-year-old used vehicle in the first quarter of 2025 was $30,522, a 2.3% increase from $29,844 last year, according to the report from Edmunds. Used vehicles also sat in lots for 38 days, four days longer than last year.

The average cost for a new vehicle was $48,799 in May, according to recent data from Cox Automotive’s Kelley Blue Book.

“Used vehicles have become increasingly rare, especially at that 2-, 3-, 4-year-old age range, which are usually some of the best replacements for brand-new cars,” said Ivan Drury, director of insights at Edmunds. “For the most part, I think a lot of people, they’ll find the used car environment is going to be very tough for the next year.”

Low leasing levels in 2022 and 2023, combined with fewer overall sales due to low supply, have led to fewer lightly used vehicles for sale so far in 2025, according to the report, with the average age of trade-ins so far this year at 7.6 years. 

In the initial years post-pandemic, supply chain disruptions and a shortage of microchips needed in cars led to a shortage of new vehicles, Newsday has reported. That's led to fewer sales and leases in recent years, with leasers often opting to buy out their car at the end of their term, Drury said.

“It’s kind of a double-down effect,” Drury said. “New car sales overall were lower for years during COVID, but on top of that, a lot of vehicles people buy that are 2, 3, 4 years old are either from rental companies or leasing.”

Last year, total sales in the used-vehicle market reached approximately 37.4 million units, including 19.9 million retail sales, according to Cox Automotive, while just over 16 million new vehicles sold. 

Used Teslas in particular are losing value faster than any other car brand, Newsday has reported, with the decline driven by softening demand for electric vehicles and backlash against the political activities of Tesla CEO Elon Musk.

A June report by research firm iSeeCars found that values for used Teslas dropped by 8.4%, or nearly $2,800, over the past year.

The report further noted that, for consumers with cars purchased or leased in the early 2020s, “elevated resale values” could offer an “unexpected opportunity” to transition vehicles. For dealers, used vehicles “will be critical” to bolster potential shortfalls in the future.

Tariffs have not yet significantly impacted the auto market, and likely won’t for another month or so, he said. The consumer base stepping back so far largely includes impulse shoppers, and only a few automakers have announced plans to increase pricing.

Regional car dealers similarly said they're seeing fewer impulse shoppers, including Giovanni Petruzziello, owner of Legends Auto Boutique in North Haven, Connecticut, with a customer base that includes Long Islanders. 

People who don’t need a car are “thinking twice before window-shopping,” but otherwise, there remains a strong demand for vehicles and auto services, he said.

Tariffs have made it more difficult to purchase parts, he said, but his shop has not otherwise struggled with a low supply of used vehicles. 

Nelson Peraza, sales manager at East Hills Volkswagen in Sayville, said the dealership has not yet seen the spike in trade-in values described in the Edmunds report either.

“Customers are cautious" though, he said. Compared to last year, sales are lower than expected.

Costa said consumers at King O'Rourke Cadillac right now seem to more often be those with the disposable income for luxury vehicles $80,000 and up. 

The Smithtown dealership leases a lot of cars so it has a steady supply of used cars, he said. More people, however, are "absolutely buying out their leases now, especially ones with low miles and ... still within their factory warranty."

Plus, when it comes to new vehicles, "there's a lot of constraints, there's a lot of stuff that's not available," he said. "The demand is there, the product isn't there and the supply chain isn't there."

Denis Dagger, vice president and general manager of the Smithtown Toyota and Smithtown Kia car dealerships, similarly said it's more difficult to obtain new vehicles.

"On new car sales, it's without a doubt, almost around the same type of shortage as post-pandemic," he said. "I've been doing this 52 years, and between the 9/11s and the Sandys and all the rest of it, there's been some hard times. But this is a true blue shortage."

Concerns about tariffs and the economy have also driven more customers to consider lightly used cars over the past five months, he said. 

A recent report from CarGurus, another auto research and shopping site, found — like Edmunds — the average price for a new vehicle is holding steady so far despite impending tariffs, and used-cars, especially 3- and 4-year-old models, “remain scarce and priced at a premium due to lingering effects of pandemic-era production disruptions.”

The largest decline in listings has been among affordable vehicles under $30,000, said Kevin Roberts, director of economic and market intelligence at CarGurus.

There might be better value for new vehicles of older models, he suggested.

CarGurus also noted in its mid-year review that hybrids are the fastest-growing new vehicle segment, outpacing even electric vehicle sales, which continue to grow. 

Newsday’s Lee Meyer contributed to this story.