New Car Prices Just Spiked Despite Inflation Cooling Off

The average price paid for a new car in April was $48,699, which was up 2.5% from March, according to Cox Automotive and Kelly Blue Book.

It was only up 1.1% compared to April 2024, however, and may reflect strong demand as customers flocked to dealerships in an effort to avoid the new tariffs being levied on imported cars and parts. Sales for the month came in at an annualized pace of 17.3 million, while the all-time record for vehicle sales was 17.5 million in 2016.

The inflation rate was 2.3% in April, which was lower than projected and the lowest since 2021.

“Ever since President Trump announced auto tariffs 47 days ago, the cost of new cars has been steadily climbing. Even though there was a surge in shopping and sales early on, the manufacturer’s suggested retail prices haven’t budged,” Cox Automotive Executive Alanyst Erin Keating said.

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“The pricing landscape is varied depending on the automaker, car segment and specific models – some are cutting incentives, others are in high demand, and the supply isn’t evenly distributed across the board.”

The sharpest increases were at the top and bottom of the market, with high performance cars coming in up 7.9% at $122,370 and subcompact cars up 10.1% at $25,809. Both segments skew toward imported vehicles, so the threat of large price increases on the horizon pushed up demand.

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Electric vehicle prices were up .2% percent from March and 3.7% from last April to $59,255 even as overall sales volumes were down in the segment.

The new car price increases were accompanied by a similar 2.7% spike from March in the wholesale used car market, which is collateral damage from the new car demand.