U.S. car prices, consumer demand surge in April after tariffs hit

Kalea Hall · Thomson Reuters

· Posted: May 13, 2025 7:53 AM EDT | Last Updated: 8 minutes ago

U.S. new-vehicle prices surged successful April, information released connected Monday showed, a motion that the effects of President Donald Trump's auto-tariff measures are rippling done the car market.

The mean terms consumers paid, aft discounts and promotions, roseate 2.5 per cent from March, much than treble the emblematic 1.1 per cent summation implicit those 2 months successful caller years, Cox Automotive's Kelley Blue Book showed. 

In the past decade, the lone larger specified summation was successful April 2020, erstwhile prices roseate 2.7 per cent during pandemic-related mill shutdowns.

Automakers are adjusting to 25 per cent U.S. tariffs connected conveyance imports from galore countries, including large trading partners Mexico and Canada, but fewer person raised sticker prices. Some, like Hyundai, Ford and Jeep-maker Stellantis, person adjacent rolled retired deals to reassure buyers and support income flowing.

Still, user request has risen implicit the past fewer months arsenic buyers unreserved to get up of immoderate tariff-related terms increases, dealers and car executives person said. That has translated into new-car shoppers shelling retired much connected mean astatine dealerships, according to Cox.

Yet, adjacent if carmakers clasp prices steady, user expectations that tariffs volition yet nonstop prices higher apt led to ostentation connected definite models, said Cox enforcement expert Erin Keating.

"Those models got much demand, and truthful the section pricing dynamics astatine the dealership level apt helped those prices spell higher."

Ford is charging much for its Mexico-built products, Reuters archetypal reported past week. Some models of the Mustang Mach-E electrical SUV, Maverick pickup and Bronco Sport volition outgo arsenic overmuch arsenic $2,000 USD more, according to a announcement sent to dealers.

Wholesale used-vehicle prices roseate successful April, according to Cox's Manheim Used Vehicle Value Index, which accrued 4.9 per cent to 208.2 from a twelvemonth ago, up 2.7 per cent from March.

Promotions person kept prices dependable overall, immoderate automakers said.

Consumer-incentive programs are inactive precise strong, said Todd Szott, trader spouse astatine Szott Automotive Group, which has Ford, Stellantis and Toyota dealerships successful Metro Detroit. "Pricing is reasonably unchangeable astatine this point."

Sales incentives connected caller cars arsenic a percent of transaction prices, a measurement of discounts and promotions, fell to the lowest since the summertime of 2024, Cox said.

A dip successful the fig of vehicles sitting connected trader tons could constituent to upward unit connected prices successful coming months.

On a caller webinar with the Automotive Press Association, Cox Chief Economist Jonathan Smoke noted that less than 2.6 cardinal vehicles are connected trader lots, and that proviso could fall even further arsenic income surge and importers trim deliveries.

Paul Zimmermann, partner-owner astatine Matick Automotive Group of Michigan, which owns GM and Toyota stores, said conveyance stocks are getting lighter successful immoderate areas aft a robust April.

"I bash person immoderate concerns conscionable successful presumption of the pipeline," helium said. "It's moving steadfast close now, but we request to marque definite that there's nary blip."

Cox antecedently estimated caller vehicles straight affected by a 25 per cent tariff could outgo 10 per cent to 15 per cent more, portion the prices connected vehicles not affected by the afloat tariff could emergence 5 per cent.

Keating does not expect double-digit percentages soon, but possibly implicit the agelong term. Automakers whitethorn usage model-year changeover clip successful the summertime to set prices, she added.