Auto inventory has fallen as buyers rushed to beat the tariffs

By summer, prices for new and used vehicles could be higher

By Mark Huffman of ConsumerAffairs

April 16, 2025

Key takeaways

• Pre-tariff buying depletes inventory: Auto buyers rushed to purchase vehicles before new tariffs take effect, leading to a sharp increase in sales in March and significantly reducing inventory levels for both new and used vehicles.

• Summer prices expected to rise: Prices for both new and used vehicles are anticipated to climb this summer. New vehicles affected by tariffs could see price hikes of 10% to 15%, while even non-tariffed models might experience at least a 5% increase due to market pressures.

• Challenges for buyers: As pre-tariff inventories are sold off, dealers will have fewer vehicles on lots, further constraining supply. The combination of reduced selection and higher costs will likely cause a slowdown in buyer activity after April.

Its not unusual to see car sales increase in the spring as consumers receive their tax refunds. But Cox Automotive reports March saw a surge in auto sales, and not just because people had more money in their bank accounts.

Cox Automotive Chief Economist Jonathan Smoke says consumers realized tariffs were coming and wanted to get ahead of them.

Tax refund season is reaching an end, but sales of new vehicles are accelerating as consumers move to buy before the pre-tariff inventory is exhausted, Smoke said in Cox Automotives Auto Market report video. Sales for used are up as well, just not as strongly. Momentum on the 2025 roller coaster ride is likely to remain strong at least through April. But as prices rise, buyers are likely to pull back.

The report notes that a surge in vehicle sales rose sharply at the end of March, reducing the supply of both new vehicles and used vehicles. The new-vehicle average transaction price (ATP) held mostly steady at $47,462. Sales incentives stayed flat compared to February and were higher than last year.

In the wholesale market, cox found that used-vehicle prices experienced a slight dip in March compared to February, as reflected in the Manheim Used Vehicle Value Index. The decline was due to the seasonal adjustment.

A dwindling selection

Meanwhile, consumers are likely to find a dwindling selection of cars and trucks on dealers lots. Thats because vehicles imported before the tariffs took effect are exempt.

All signs point to higher prices this summer, as existing pre-tariff inventory is sold down to be eventually replaced with tariffed inventory, Erin Keating, executive analyst at Cox Automotive, said in a news release. How high prices rise for consumers is still very much to be determined, as each automaker will handle the price puzzle differently.

Keating said that if the White House maintains its position, new cars subject to the full 25% tariff will see price increases in the range of 10% to 15%. In addition, considering the market dynamics, Coxalso anticipates seeing at least a 5% increase in prices of vehicles not subjected to the full 25% tariff.

There is no way around it, Keating said. Tariffs are going to push new-vehicle prices higher in the U.S.

Sign up below for The Daily Consumer, our newsletter on the latest consumer news, including recalls, scams, lawsuits and more.

.newsletter-form {
display: flex;
max-width: 400px;
margin: 20px auto;
background: #f8f9fa;
padding: 10px;
border-radius: 8px;
box-shadow: 0 4px 6px rgba(0, 0, 0, 0.1);
}
.newsletter-input {
flex: 1;
padding: 10px;
border: 1px solid #ccc;
border-radius: 5px 0 0 5px;
font-size: 16px;
outline: none;
}
.newsletter-input:focus {
border-color: #007bff;
}
.newsletter-button {
background: #2976D1;
color: white;
border: none;
padding: 10px 15px;
font-size: 16px;
border-radius: 0 5px 5px 0;
cursor: pointer;
transition: background 0.3s ease;
}
.newsletter-button:hover {
background: #0056b3;
}

Subscribe



#Auto #inventory #fallen #buyers #rushed #beat #tariffs