Analysts point out carmakers want to retain buyers, who are already strained by high loan payments, interest rates and insurance|Emilio Labrador|CC BY 2.0
Despite steep tariffs on imported materials, such as steel, auto parts and vehicles, car prices haven’t jumped as much as expected, according to Kelley Blue Book.
New-vehicle transaction prices rose just 1.2% year over year in June, as automakers absorbed most of the added costs.
Analysts point out carmakers want to retain buyers, who are already strained by high loan payments, interest rates and insurance. Many are facing $1,000+ monthly car payments while the average new car costs ~$50,000.
Carmakers like General Motors, Hyundai, Kia, Volkswagen, and Stellantis have reported billions in tariff-related expenses in the past few weeks. Car prices are also stable due to dealers stocking up on tariff-free inventory.
While automakers remain profitable for now, they face growing pressure to cut costs and consider reshoring production. Experts warn 2026 car prices could rise by up to 8%.
Meanwhile, other industries are already passing on tariff costs.
Tide, Gillette and Dawn maker Procter & Gamble plans to raise prices on 25% of its products and Adidas expects an added $231 million in tariff-related costs and is eyeing US price increases.
Several others, including Walmart, Ralph Lauren, Mattel, Subaru and Nike, recently announced price hikes.