New-Vehicle Transaction Prices Rise as Tariff Talk Causes ‘Buying Frenzy’

The average transaction price (ATP) of new vehicles increased by 2.5% in April, driven by a decline in sales incentives amid talk of tariffs, Cox Automotive ’s Kelley Blue Book said Monday (May 12).

The company characterized the month-over-month rise in the new-vehicle ATP as “sharp,” saying in a press release that the typical increase seen in April is 1.1%.

In the past decade, the only April that saw a larger increase was April 2020, when there was a month-over-month increase of 2.7%, according to the release.

While ATPs increased by 2.5% month over month, new-vehicle prices saw a year-over-year increase of 1.1%. That figure is below the long-term average of more than 3%, but it’s higher than that seen in recent months, the report said, adding that new-vehicle prices have been mostly flat since the COVID-era shortages ended in April 2023.

New-vehicle sales incentives fell to their lowest level since the summer of 2024. Kelley Blue Book attributed that decline to a “buying frenzy” that lifted the sales pace to the strongest April since 2021.

“Ever since President Trump announced auto tariffs 47 days ago, the cost of new cars has been steadily climbing,” Cox Automotive Executive Analyst Erin Keating said in the release. “Even though there was a surge in shopping and sales early on, the manufacturer’s suggested retail prices haven’t budged. The pricing landscape is varied depending on the automaker, car segment and specific models — some are cutting incentives, others are in high demand, and the supply isn’t evenly distributed across the board.”

It was reported in April that the 25% tariffs added to imported cars and, later, imported auto parts would drive up the price of new vehicles by thousands of dollars.

Analysts said the duty on parts was expected to drive up the cost of cars assembled in the U.S. because most of these vehicles contain components made overseas, often comprising more than half the cost of the car.

In March, it was reported that car buyers were speeding up their shopping due to tariff worries. Searches on Cars.com climbed by 9% between Feb. 16 and Feb. 22.