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Average new car prices held steady in May despite tariff pressures
CDG News Alert (1 min. read)
Anna del Villar
June 11, 2025
Driving the news: New car prices held remarkably steady in May at $48,799, barely budging despite mounting tariff pressure that's squeezing dealer profits.
For context: Data from Kelley Blue Book shows the average transaction price was virtually unchanged from April's $48,811.
However, the sales pace cooled significantly from 17.3 million to 15.6 million.
And most automakers actually cut incentive spending, with VW, Mazda, and BMW all reducing offers by more than 10%, while Tesla, Toyota, and Nissan boosted theirs.
What they’re saying: “Many automakers are keeping true to a promise to hold the line on pricing, at least in the near term," said Cox Automotive's Erin Keating. But she warns dealer profitability is getting squeezed as costs rise while "raising retail prices in this environment is a real challenge."
What we're watching: Electric vehicles are bucking the trend, getting more affordable with average prices dropping to $57,734 from $59,123 in April. Tesla led the decline with prices falling 1.5% to $55,277, while EV incentives hit record levels at 14.2% of transaction prices.
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