New vehicle prices in the United States (US) soared in April, driven by the impact of President Donald Trump’s auto tariffs on the auto market.
In addition, the average cost paid by consumers jumped 2.5% from March after discounts and promotions, more than double the usual 1.1% increase over the past two months.
The highest increase was recorded in April 2020 when prices rose by 2.7% during factory closures due to the Covid-19 pandemic.
In addition, US automakers have also imposed 25% tariffs on foreign cars from many countries, including major trading partners Mexico and Canada.
Major companies Hyundai, Jepp Stellantis and Ford have been promoting offers in an attempt to convince buyers to ensure good car sales.
In recent months, consumer purchasing power has expanded as buyers rush to get ahead of any price increases related to Trump’s tariffs.
Cox executive analyst Erin Keating said that while car prices remained stable, consumer expectations of tariffs raising prices could lead to inflation on certain models.
Used car purchase prices rose 4.9% in April to 208.2 a year ago, compared with 2.7% in March as promotional strategies stabilized overall prices.
Cox Chief Economist Jonathan Smoke said that fewer than 2.6 million vehicles were on dealer lots, and that number is likely to continue to fall due to a surge in sales and reduced shipments by importers.
Cox also estimated that new vehicles affected by tariffs could cost 10% to 15% more, while prices of vehicles not affected by tariffs could increase by 5%.
