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March new car prices stay flat, but sub-$30K models are fading
Behind that calm? A rush of buyers trying to beat the potential price hikes tied to auto tariffs. (4 min. read)
Marcus Amick
April 10, 2025
New vehicle prices held steady in March—as car shoppers raced to dealerships to beat the higher prices expected due to tariffs.
The details: According to Kelley Blue Book, the new vehicle average transaction price (ATP) remained mostly steady month over month and year over year last month at $47,462, with sales incentives being flat month to month but higher year over year—as the reality of auto tariffs settle in.
The new vehicle ATP for March is a slight dip from the revised-lower ATP for February, which was $47,577 and higher year over year by less than 1%.
March sale incentives were flat compared to February when they were 7.0% of ATP, but higher by 5% than year-ago levels when incentives were equal to 6.7% of ATP.
New-vehicle incentives have averaged near 7.1% of ATP, peaking in November and December of 2024 at 7.9% of ATP incentives—with $3,339 being the average incentive package in March.
What they are saying: “We are believing that some form of tariff is going to stick around, for certain. Automotive is dealing with the 25% right now. Does the 90-day pause make us believe that perhaps there's some room for that 25% to come down in the near future, potentially? But we think the genies out of the bottle, tariffs are going to stick around at some level,” said Erin Keating, Executive Analyst at Cox Automotive.
What it means: Expect increased demand over the next month as consumers look to move up their vehicle purchases if they’re in the market for a vehicle. However, that demand could fall off if the economy worsens and consumer sentiment drops, says Keating.
Between the lines: Most core volume brands showed price increases year over year in March, led by Infiniti, Lincoln, Mazda, Porsche and Volvo—with Jeep, Ram, and Mercedes-Benz having the lowest ATPs.
The average transaction prices of Infiniti were up by 18.9% and Porsche by 11.5%, the two brands up the most year over year in March.
Jeep’s average transaction prices were -10.6% in March, followed by Ram at -5.8%, 0and Mercedes-Benz at -4.7%.
Digging deeper: Only 26 new vehicle models had ATPs lower than $30,000 in March, accounting for roughly 14% of total U.S. sales—which is an issue says Keating, though she cautions to keep it in perspective.
Many vehicles priced below $30,000 are highly vulnerable to the 25% tariffs enacted by President Donald Trump.
They include the Buick Envista, Chevy Trax, Honda HR-V, Kia Soul, Mazda3, Nissan Sentra, and the now-discontinued Mitsubishi Mirage – the only vehicle in the U.S. with an ATP under $20,000.
“The tariffs are going to put 25% on vehicles are fully assembled, being imported to the United States. But that's just cost…I still don't think that you're going to see a $30,000 vehicle increase by 25% on the market. That would immediately make that segment unviable. You'll probably see some of the more profitable models absorb…more cost,” Keating added.
Bottom line: New vehicle ATPs for tariff-affected cars are sure to increase as more start rolling into dealerships and current inventory begins dwindling, making it even more challenging for retailers and buyers to secure new vehicles with an ATP below $30,000.
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