Monday August 11, 2025
New-vehicle prices in July remained largely unchanged from June, with only a slight decline month over month as incentive spending accelerated and fueled strong sales volumes. According to new estimates from Kelley Blue Book, however, annual gains in new-vehicle average transaction prices (ATPs) and manufacturer’s suggested retail prices (MSRPs) – two key measures of vehicle price increases in the U.S. – are accelerating but remain below long-term averages.
“In the face of rising prices, it is becoming more evident that the new-vehicle market is being supported by pent-up demand driven largely by high-net-worth households. These buyers are benefiting from the wealth effect of a healthy stock market and solid wage growth since the pandemic. At the same time, automakers are providing healthy incentives to keep sales flowing. Prices are trending higher, but just as we are seeing in the broader retail markets, there’s sufficient demand and generous incentives out there, and that’s driving the market.”
“The urgency created by the administration’s decision to sunset government-backed, IRA-era EV incentives was expected to create serious demand for EVs in the short term. If last month is any measure: Mission Accomplished. July sales were near an all-time monthly record. At this pace, Q3 will be the best ever and then some, as buyers jump in before the big incentives dry up.”
The Cox Automotive Economic and Industry Insights team is closely monitoring tariff developments and regularly publishing insightful commentary and analysis as appropriate.
