When President Trump unveiled his tariff plans on automobiles and automobile components in April, he stated, “you’re going to see costs go down.” Sadly, the fact is totally different. A brand new examine from Vehicles.com on supplier stock within the first half of 2025 signifies that the availability of recent automobiles underneath $30,000 is slowing down.
The examine notes that the under-$30,000 phase is probably the most uncovered to tariffs, as 92% of the fashions inside it are imports. Simply two, the Honda Civic and Toyota Corolla, are constructed within the US, and even then, some Corolla and Civic variants come from exterior the US. By way of supplier stock, the phase noticed 3.9% development 12 months over 12 months (YoY), however that lags behind the 5.6% total improve YoY for new-car stock.
The examine additionally reveals that sellers stocked up on stock earlier than tariffs started in April, and gross sales elevated in March and April, up by 3.9% YoY in comparison with the primary half of 2024. This has had a couple of fascinating results. There was a better provide of used autos because of trade-ins from prospects seeking to get into a brand new automobile earlier than the tariffs hit, and people automobiles began promoting shortly. Used automobile costs dipped barely within the first quarter of 2025 however rose by 1.6% YoY within the second quarter.
Now, the availability of pre-tariff new automobiles is dwindling, and with that, the examine says we must always anticipate value will increase. To this point this 12 months, common new-car costs rose by simply $97, however autos from the UK obtained over $10,000 costlier. EU-built automobiles, in the meantime, noticed a median improve of practically $2,500. Chinese language, Canadian, and Korean automobiles noticed costs drop, as did US-built automobiles, to the tune of $200 on common.
For the second half of 2025, we will anticipate larger costs and smaller demand. “The tempo of gross sales and stock motion will rely upon the scope of tariffs, with automakers prone to regulate manufacturing to align with a smaller, extra price-sensitive purchaser pool,” Vehicles.com says within the report.
Vehicles.com has another fascinating insights. It surveyed EV patrons, and 53% of respondents stated Federal tax credit had been a important motive for getting their automobiles. With each the $7,500 credit score for brand spanking new EVs and $4,000 credit score for used EVs going away after September, this can have a big effect on EV affordability. The examine says it could be “tough” to maintain the momentum of 28 months of consecutive new EV stock development. Vehicles.com additionally thinks the marketplace for used EVs is bottoming out.
The examine additionally notes that automakers are rising manufacturing of decrease and better car trims, with mid-level trims seeing a small lower. Decrease trims are clearly interesting to extra price-sensitive patrons, particularly in a world of elevated costs total, whereas larger trims are extra worthwhile. Shifting the mannequin combine looks like it may alleviate among the results of tariffs.
