Tariffs and high-end imports drove the increase
of ConsumerAffairsMay 20, 2025
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Average new-vehicle transaction prices jumped to $48,699 in April, a 2.5% increasewell above the historical April average.
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Sales of high-end import brands like Porsche and Land Rover surged, raising industry-wide ATPs as tariffs loom.
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Incentive spending declined in key SUV segments, even as prices remained flat, signaling tighter manufacturer discounts.
New car buyers saw prices climb sharply in April, as automakers grappled with the impact of new tariffs and shifting consumer demand. According to Kelley Blue Books latest report, released by Cox Automotive, the average transaction price (ATP) for a new vehicle rose to $48,699marking a significant 2.5% increase from March and signaling the strongest April price jump since the pandemic-disrupted market of 2020.
This unseasonably steep rise comes amid increased market volatility sparked by recently announced auto tariffs. In the words of Erin Keating, executive analyst at Cox Automotive, Ever since President Trump announced auto tariffs, the cost of new cars has been steadily climbing.
But the increase wasnt just because of tariffs. Much of the April spike was driven by luxury import brands that are particularly vulnerable to the newly imposed tariffs.
Porsche and Land Roverboth of which import 100% of their U.S. modelsrecorded their best sales months of 2025, with ATPs exceeding $114,000 and $113,000, respectively. The surge in high-end purchases elevated the industry-wide average and highlighted a scramble among affluent buyers to lock in prices before further hikes take hold.
Mixed results for mainstream brands
The report painted a mixed picture across volume brands. General Motors Cadillac, Chevrolet, and GMC divisions all saw ATPs rise, even as incentive levels remained steady. Conversely, Buick experienced falling prices and ramped up discounts. Luxury brands Acura and BMW adopted a similar playbook, offering deeper incentives to maintain competitiveness.
Ford, one of the few major automakers emphasizing its domestic production, leaned into a patriotic marketing campaign. The brand promoted price stability in its April advertising, a strategy that mostly held true, with prices and incentives largely unchanged from March.
However, its popular Maverick pickupa compact truck built in Mexicobucked the trend. Sales hit a record 20,183 units in April as the model posted lower prices and boosted incentives to an all-time high of 6.6% of ATP.
Stable prices for small SUVs
Compact and subcompact SUV prices remained flat in April, hovering around $36,416 for Compact SUVs. But that apparent stability masked a tightening discount environment. Incentives in the Compact SUV segment dropped from 8.2% to 7.8% of ATP, while Subcompact SUV buyers also saw fewer deals.
These segments are not immune to the broader pricing pressures, said Keating. Incentive cuts are increasingly common, especially where demand is solid and inventories are constrained.
While the month-over-month spike was eye-catching, the year-over-year increase in ATP was a modest 1.1%. That figure remains below the historical average of over 3% and reflects a market that has, until now, been relatively stable following inventory normalization after the pandemic. Aprils seasonally adjusted annual rate (SAAR) for sales came in at 17.3 milliona slight dip from March but the best April showing since 2021.
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