US car prices rose in April - Effects of Trump tariffs "shake" the auto industry
New vehicle prices in the United States rose in April, US data showed, reflecting the impact of the Trump administration's auto tariffs on the auto market.
The average price consumers pay, after discounts and promotions, rose 2.5% from March, more than double the typical 1.1% increase during those two months in recent years. In the past decade, the only such increase was in April 2020, when prices expanded by 2.7% during pandemic-related factory closures.
Automakers are adjusting to 25% U.S. tariffs on vehicle imports from many countries, including major trading partners like Mexico and Canada, but few have raised their prices. Some, like Hyundai, Ford and Jeep maker Stellantis, have even announced deals to appease buyers and keep sales flowing.
However, consumer demand has increased in recent months as buyers rush to avoid tariff-related price hikes, dealers and auto executives said.
However, even if carmakers keep prices steady, consumer expectations that tariffs will eventually push prices higher are likely to drive inflation for certain models, according to analysts.
Ford is asking for more money for its products made in Mexico, according to Reuters. Some models of the Mustang Mach-E, Maverick and Bronco Sport will cost up to $2,000 more.
Wholesale prices of used vehicles rose in April, according to the Used Vehicle Value Index, which rose 4.9% to 208.2 compared to a year earlier, 2.7% more than March.
"Consumer incentive programs are still very strong and prices are quite stable so far," say sector experts.
Sales incentives for new cars as a percentage of transaction prices, a measure of discounts and promotions, fell to the lowest level since the summer of 2024.
The decline in the number of vehicles at dealerships may reflect upward pressure on prices in the coming months.
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