The average new car buyer paid 2.5% more in April than in March, likely the first sign of car prices starting to creep up as new tariffs change the market.
The average buyer paid $48,699 last month, according to the latest average transaction price (ATP) report from Kelley Blue Book. Prices usually increase in April, but that figure is the second-highest April increase in a decade.
Americans bought far more cars than normal during the month. The seasonally adjusted annual rate, a measure that shows how many cars Americans would buy in a year if the current sales rate didn’t change, hit 17.3 million. The sales pace was lower than March but the strongest April since 2021.
The increase came despite automakers and dealers pulling back on incentives. Discounts made up just 6.7% of the average sale last month, down from March’s 7%. Before the start of tariffs, incentives had been climbing toward their pre-pandemic norm of 10% or more.
Tariff Price Impacts Come Slowly
New tariffs add 25% to the cost of importing a finished car from outside North America. A second round of tariffs adds to the cost of car parts. Since every vehicle built in North America uses foreign parts, that round increases the cost of building cars domestically.
Tariff Price Increases Come Slowly
But prices haven’t jumped immediately to match the impact of tariffs.
That’s happening for two reasons. The first reason is that dealers have a supply of cars brought into the country at pre-tariff prices. Some brands had just a month’s worth of cars in the country when the tariffs began, while others had more than three months’ worth.
In every case, dealers know they will need to raise prices to pay the tariff on replacement inventory, but not yet. Cox Automotive Executive Analyst Erin Keating explains, “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.”
Cox Automotive owns Kelley Blue Book.
The second reason is that most automakers are trying to avoid significant price increases for as long as possible.
Several, including Hyundai, Nissan, and Mercedes-Benz, have publicly pledged to keep prices flat until particular dates. Others have not made public promises, but have told dealers to expect steady prices for now.
Ford advertised its intent to keep prices steady, and the move brought in shoppers. Its Mexico-built Maverick compact pickup set a sales record last month.
Some Imported Brands Seeing Steeper Hikes
Porsche had the highest transaction price of any major automaker (excluding boutique super luxury and exotic brands), with an average of over $114,000. Land Rover came in second, with an average of over $113,000.
Both brands import 100% of their products from Europe.
Despite higher prices, both had their best sales month of 2025 in April. But that result is likely a pull-forward effect, as buyers rush to snap up the cars imported at pre-tariff prices.
EV Prices Increasing
The price of the average electric vehicle has been in steady decline for most of two years, helped by government incentives and economies of scale. That may be over. The average EV sold for $59,255 in April — 3.7% more than March’s price.
Market leader Tesla had its best month of 2025 on the strength of increased sales for its recently refreshed Model Y. However, sales of the company’s signature Cybertruck fell below 2,000 for the first time.
New EV sales were lower month over month by nearly 6%, according to initial estimates from Kelley Blue Book. Year-to-date EV sales in 2025 are higher by 5.4%.