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Auto Blog
13 hours ago
- Automotive
- Auto Blog
Tariffs Are Making New Cars Even More Unaffordable, Says Study
By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. New cars are expensive New cars are expensive, but the latest data indicates that they aren't slowing down any time soon. According to data from Cox Automotive and Kelley Blue Book, the average transaction price for a new car reached $48,907 in June 2025, a 1.2% increase from the same period last year. Though it seems like a high amount, a quick glance at car-buying platforms and automakers' websites shows that there are many models on the market with MSRPs far below that threshold. However, a new study from the research department at Cars Commerce, the company behind , shows that a few key factors will keep cars unaffordable. Previous Pause Next Unmute 0:00 / 0:10 Full screen Automakers brace for uncertain future amid Trump's tariff pause Watch More Source: Getty Images Where did all the cheap cars go? According to new data from Cars Commerce's Industry Insights Report for the first half of 2025, the impact of the Trump administration's tariffs on imported cars, as well as the threat arising from the end of Federal EV Tax Credits, would fuel an affordability crisis that can greatly impact the U.S. car industry. 'With price hikes on many imports starting to emerge, the $7,500 federal EV tax credit set to expire in September, and the entry-priced segment now shrinking for three consecutive months, affordability remains the biggest challenge to continued growth,' said David Greene, industry analyst at Cars Commerce. 'How automakers respond in the second half — through pricing, production, and incentives — will shape the road ahead.' Most notably, Cars Commerce found that the inventory of cars priced under $30,000 saw a massive dip. Per their data, cars under $30K made up just 13.6% of new car inventory in the first half of 2025. That number is a considerable loss compared to 2019, when such vehicles made up 38% of the market. Source:In terms of dealer inventory, the segment saw 3.9% growth year over year (YoY); however, it lags behind the 5.6% overall increase for new-car inventory. The segment is the most exposed to tariffs, as about 92% of the cars sold under $30K are actually imported from overseas. Just two cars in that segment, the Honda Civic and Toyota Corolla, are built in the US, though some models are produced in Japan. Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. At the same time, the segment that defined as the 'mid-range new car segment;' which consists of cars costing between $30,000 and $49,000, accounted for nearly half of all inventory, though 50% of the vehicles in this price bracket are imported. The data suggests that automakers are adjusting to tariffs, as the share of imported cars within the $70,000-plus price segment increased from 40% in May to 41% in June. The study also shows that dealers increased their inventory by 5.6% during the first half of 2025, as they stocked up before tariffs were imposed in April. Additionally, there was a surge in sales as consumers rushed to secure pre-tariff pricing in March and April, leading to a 3.9% increase in new car sales compared to the first half of 2024. The increase in new vehicle purchases raised the supply of used cars, as many customers traded in their vehicles before the tariffs took effect. Consequently, used car prices dipped slightly in the first quarter of 2025 but rebounded with a 1.6% increase in the second quarter. Source: Getty Images According to data from , more than half of consumers said that the tariffs have influenced their decision to buy American-made cars. Additionally, over 73% of respondents would consider purchasing U.S.-built cars to avoid extra costs. Currently, the supply of pre-tariff new cars is depleting, and as a result, the study predicts that we should expect price increases in the near future. So far this year, the average price of new cars has risen by only $97; however, vehicles from the United Kingdom have become over $10,000 more expensive. In contrast, EU-built cars have seen an average increase of nearly $2,500. Meanwhile, the prices of vehicles from China, Canada, and Korea, as well as American-built cars, have decreased by an average of $200. In addition, Cars Commerce also found that EV buyers will be affected in the latter half of the year, as the federal $7,500 tax credit for new EVs is set to expire after September. In its survey of electric vehicle (EV) buyers, 53% said that the federal tax credits were a primary reason for their purchases, adding that it may be 'difficult' to maintain the momentum of 28 consecutive months of new EV inventory growth once the calendar hits October. Final thoughts The Trump administration and some lawmakers say they're trying to make cars more affordable by imposing tariffs, but according to the consulting firm AlixPartners, these tariffs could cost the auto industry about $30 billion by 2026. Although manufacturers like Nissan and Volvo are taking localization concerns seriously with their recent plans to consolidate factories, trim the U.S. lineup, and move production of their top-selling vehicles to factories in the U.S., it should be reiterated that this isn't a simple flip of the switch; Volvo, for instance expects to make the first XC60s in South Carolina by 2026. Until then, those on the buyers' side have all the tools to find out which specific vehicles are 'American-made,' including the NHTSA's Part 583 American Automobile Labeling Act Reports, which are publicly available on their website. About the Author James Ochoa View Profile
Miami Herald
14 hours ago
- Automotive
- Miami Herald
Tariffs Are Making New Cars Even More Unaffordable, Says Study
New cars are expensive, but the latest data indicates that they aren't slowing down any time soon. According to data from Cox Automotive and Kelley Blue Book, the average transaction price for a new car reached $48,907 in June 2025, a 1.2% increase from the same period last year. Though it seems like a high amount, a quick glance at car-buying platforms and automakers' websites shows that there are many models on the market with MSRPs far below that threshold. However, a new study from the research department at Cars Commerce, the company behind shows that a few key factors will keep cars unaffordable. According to new data from Cars Commerce's Industry Insights Report for the first half of 2025, the impact of the Trump administration's tariffs on imported cars, as well as the threat arising from the end of Federal EV Tax Credits, would fuel an affordability crisis that can greatly impact the U.S. car industry. "With price hikes on many imports starting to emerge, the $7,500 federal EV tax credit set to expire in September, and the entry-priced segment now shrinking for three consecutive months, affordability remains the biggest challenge to continued growth," said David Greene, industry analyst at Cars Commerce. "How automakers respond in the second half - through pricing, production, and incentives - will shape the road ahead." Most notably, Cars Commerce found that the inventory of cars priced under $30,000 saw a massive dip. Per their data, cars under $30K made up just 13.6% of new car inventory in the first half of 2025. That number is a considerable loss compared to 2019, when such vehicles made up 38% of the market. In terms of dealer inventory, the segment saw 3.9% growth year over year (YoY); however, it lags behind the 5.6% overall increase for new-car inventory. The segment is the most exposed to tariffs, as about 92% of the cars sold under $30K are actually imported from overseas. Just two cars in that segment, the Honda Civic and Toyota Corolla, are built in the US, though some models are produced in Japan. At the same time, the segment that defined as the "mid-range new car segment;" which consists of cars costing between $30,000 and $49,000, accounted for nearly half of all inventory, though 50% of the vehicles in this price bracket are imported. The data suggests that automakers are adjusting to tariffs, as the share of imported cars within the $70,000-plus price segment increased from 40% in May to 41% in June. The study also shows that dealers increased their inventory by 5.6% during the first half of 2025, as they stocked up before tariffs were imposed in April. Additionally, there was a surge in sales as consumers rushed to secure pre-tariff pricing in March and April, leading to a 3.9% increase in new car sales compared to the first half of 2024. The increase in new vehicle purchases raised the supply of used cars, as many customers traded in their vehicles before the tariffs took effect. Consequently, used car prices dipped slightly in the first quarter of 2025 but rebounded with a 1.6% increase in the second quarter. According to data from more than half of consumers said that the tariffs have influenced their decision to buy American-made cars. Additionally, over 73% of respondents would consider purchasing U.S.-built cars to avoid extra costs. Currently, the supply of pre-tariff new cars is depleting, and as a result, the study predicts that we should expect price increases in the near future. So far this year, the average price of new cars has risen by only $97; however, vehicles from the United Kingdom have become over $10,000 more expensive. In contrast, EU-built cars have seen an average increase of nearly $2,500. Meanwhile, the prices of vehicles from China, Canada, and Korea, as well as American-built cars, have decreased by an average of $200. In addition, Cars Commerce also found that EV buyers will be affected in the latter half of the year, as the federal $7,500 tax credit for new EVs is set to expire after September. In its survey of electric vehicle (EV) buyers, 53% said that the federal tax credits were a primary reason for their purchases, adding that it may be "difficult" to maintain the momentum of 28 consecutive months of new EV inventory growth once the calendar hits October. The Trump administration and some lawmakers say they're trying to make cars more affordable by imposing tariffs, but according to the consulting firm AlixPartners, these tariffs could cost the auto industry about $30 billion by 2026. Although manufacturers like Nissan and Volvo are taking localization concerns seriously with their recent plans to consolidate factories, trim the U.S. lineup, and move production of their top-selling vehicles to factories in the U.S., it should be reiterated that this isn't a simple flip of the switch; Volvo, for instance expects to make the first XC60s in South Carolina by 2026. Until then, those on the buyers' side have all the tools to find out which specific vehicles are "American-made," including the NHTSA's Part 583 American Automobile Labeling Act Reports, which are publicly available on their website. Copyright 2025 The Arena Group, Inc. All Rights Reserved.
Forbes
2 days ago
- Automotive
- Forbes
With Tariffs Looming, Automakers' EV Incentives Are Booming
This month Nissan is offering a $10,000 cash rebate on its full-electric Ariya. Though Kelley Blue Book reports that while new-vehicle transaction prices once again rose last month to a national average of $48,907, full-electric car, truck and SUVs are becoming more affordable. Year over year, new EV prices have dropped by 2.8%, with automakers' cash, lease and financing incentives becoming more plentiful and valuable, now averaging more than $8,400 per vehicle. There's also a heightened sense of urgency in play as the one-time $7,500 federal tax credit/rebate on 15 still-eligible EVs is set to expire on September 30 as part of the recently passed budget bill. That's likely to further erode EV sales and leases, as a recent survey found that 53% of current EV owners considered the tax rebate to be a major factor in their buying decisions. As it now stands the credit can only be claimed by income-qualifying buyers on a relative handful of EVs that meet certain requirements for domestic production and are priced under $50,000 for passenger cars and $80,000 for trucks, vans and SUVs. Some automakers have managed to exploit a loophole in the legislation that passes all or part of the incentive to those who lease an EV that otherwise doesn't qualify for the credit. In addition, it's yet to be seen to what extent Trump's tariffs will ultimately affect the sticker prices on both imported models and those built in the U.S. with parts and systems built elsewhere on the globe. Some brands have already announced they'll be standing ground on retail prices, at least for the time being, while others will either hike their MSRPs to cover some or all of the tariff costs or adjust their U.S. market offerings to help keep their core customers. reports that Mercedes-Benz is going in the other direction and will be cutting the sticker prices of its slow-selling EQ-Class electric vehicles by amounts ranging from $4,150 to $12,950 for the 2026 model year. A deep dive into automakers' websites uncovered more than 40 sizzling summer incentives being offered on EVs of all styles and sizes this month, with some deals extending into August. These include buyers' rebates as generous as $10,750, financing rates at or near 0.0% and lease bonus cash as rich as $11,500. We're noting the best of the best deals below, and cite the 15 models that remain eligible for the federal tax credit. Note that several automakers also offer special cash-back rebates for current owners, those driving competitors' vehicles, members of the military and first responders. On the downside, advertised lease and financing deals are typically limited to consumers having top credit scores and qualifying household incomes. Some rebates may be limited to those financing a vehicle purchase through an automakers' captive finance division. Finally, be aware that incentives may vary from one part of the country to another to address supply and demand issues. Check automakers' websites under a 'Special Offers,' 'Local Deals' or similar tab for details on what's being offered locally. Best Electric-Vehicle Incentives For July 2025
Yahoo
4 days ago
- Automotive
- Yahoo
Cybertruck Sales Are Dead in the Water
Just when you thought things couldn't get any worse for Tesla's Cybertruck, sales for the controversial pickup truck are circling the drain after dropping off a cliff. In numbers, the Elon Musk-owned automaker sold just 4,306 Cybertrucks in the second quarter of 2025, according to the latest data from Cox Automotive's Kelley Blue Book — a stunning 50.8 percent nosedive from the same period last year. Switch Auto Insurance and Save Today! Great Rates and Award-Winning Service The Insurance Savings You Expect Affordable Auto Insurance, Customized for You It's also a big dip from the quarter before, when Tesla eked out a barely more respectable 6,406 Cybertrucks (another estimate nudges the number up to around 7,100). In total, Tesla has sold a measly 10,712 Cybertrucks this year, meaning it's nowhere near matching the 39,900 units it delivered in 2024. And it's not even in the same hemisphere as Musk's characteristically ambitious prediction that the automaker would somehow sell up to half a million of the EV trucks per year. Unfulfilled promises sum up the Cybertruck's woes, whose bold styling and stainless steel exterior, once a unique selling point, have now singled out the vehicles for instant ridicule. Musk originally told his fans that it would sell for an affordable price tag of around $40,000. But the first Cybertrucks were sold for no less than an eyewatering $100,000. This year, Tesla started offering a stripped down rear wheel drive version for $70,000 to inspire sales, but the gambit appears to have failed. Promises that the truck would be "apocalypse-proof" have also turned out to be a bust. The Cybertruck has been hit with eight recalls so far, for reasons ranging from its accelerator pedal getting stuck in the down position to losing power while driving, to its glued-on body panels flying off. Drivers have reported their rides getting bricked after taking them through a car wash — remember when Musk teased they could double as a boat? — and even brand new ones straight off the dealership lot have ended up on the back of a tow truck. It's also horrendous at off-roading and driving through shallow puddles, making it a horrible pick for a doomsday scenario. Tesla is also suffering a crisis of reputation, as Musk drags its name through the mud with his chaotic dalliance with the Trump administration and his ceaseless spewing of far-right politics. Overall, the Cybertruck is quickly losing ground in the electric truck space, where pricetags are often north of $100,000. It's being outsold by the GMC EV Hummer, of which 4,306 were sold in the second quarter, a promising 53.9 percent bump from last year, per Cox's latest numbers. A more conventional EV truck, the Chevrolet Silverado, is also trending upward with a 39.2 percent boost, though it remains behind with 3,056 sales. Meanwhile, the Ford F-150 Lightning, the best-seller in this category, saw its sales fall by 26.1 percent, down to 5,842 units sold. Making the Cybertruck look good, however, is the Rivian R1T, which is clinging on to a paltry total of 1,752 units sold, which is barely more than half the sales from Q2 2024. So congratulations to the Cybertruck: it's not the absolute least desirable of its ilk in the market right now — but it's almost certainly the most polarizing. More on Tesla: Top Execs Fleeing Tesla as Dark Clouds Grow Sign in to access your portfolio
Miami Herald
7 days ago
- Automotive
- Miami Herald
New car buyers are finally starting to feel the pain from tariffs
Car buyers have been spoiled by the current buyer's market. Car dealers have relied on incentives to combat the expected loss in demand from the 25% auto tariffs President Donald Trump announced in April. "People are buying cars because they think tariffs are coming," one Mazda dealer said. Related: Ford debuts plan to increase sales that car buyers will love Auto sales climbed sharply through the first half of the year as consumers were motivated by the incentives and the need to buy vehicles before any tariff-related price increases. A recent Bank of America note, however, suggests that the good times are slowing as consumer vehicle loan applications declined from their peak in April, "suggesting that 'buying ahead' has largely run its course." Bank of America expects lower-income and younger buyers to feel the most pain, as its data shows that median car payments have grown faster than new and used car prices since 2019. Shockingly, of those households with a monthly car payment, 20% have a payment over $1,000. Image source:Make no mistake: The auto tariffs are extremely expensive. But automakers, at the White House's behest, have chosen to swallow much of the pain for now. "Tariffs remain a major headwind for vehicle affordability," said Cox Automotive Chief Economist Jonathan Smoke. "Even with some trade relief, the added cost – up to $5,700 per imported vehicle – hits the most affordable models hardest, limiting options for price-sensitive buyers." "We are in the early stages of seeing how manufacturers deal with these added costs, but we do not believe that the American consumer can absorb it all." Related: Car buyers have a lot riding on the 'Big, Beautiful Bill' The estimated average auto loan rate rose by 5 basis points in June to 9.94%, according to Cox Automotive. The current level is still lower by 75 bps year over year, but auto loan rates are the highest they've been since December. The average new-vehicle price rose 0.2%, according to Kelley Blue Book, and the typical payment increased by 0.1% to $757, also the highest it's been since December. The average monthly payment peaked in December 2022 at $795 per month. Nearly half of American drivers cite car expenses as the reason they can't save any money, and the average American spends about 20% of their monthly income on auto loans, fuel, insurance, and maintenance. Most financial experts cap the monthly income you should spend on a vehicle at 15%. According to a MarketWatch Guides survey, about 10% of drivers say they spend 30% of their monthly income on driving, while another 12% said they "found themselves living paycheck to paycheck due to the financial strain of their cars." In addition to capping your car payments at about 15% of your monthly take-home, financial experts also recommend shoppers aim for a 20% down payment, a 36- to 48-month loan term, and expenses (including insurance) at between 8% and 10% of your gross monthly income. Experts also recommend that you know your credit score and loan approval amount in advance and that you shop around with different lenders for the best rate. Related: Another luxury car maker is taken down by US tariffs The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
