New car prices in the United States continue to rise, and analysts say many consumers are responding by postponing purchases or shifting to used cars. Despite year-end incentives and Black Friday promotions, affordability concerns and buyer fatigue are weighing heavily on the market.
Industry experts expect new-vehicle sales to remain weak through the rest of this year and into 2026. “As long as interest rates remain high and uncertainty remains in policy, affordability will be a challenge,” Erin Keating, executive analyst at Cox Automotive, told the Detroit Free Press.
Early forecasts for November sales show a sharp decline. Cox Automotive estimates U.S. volume at 1.27 million units, down 1% from October and nearly 8% below last year’s level. J.D. Power anticipates retail sales of about 1.06 million units, a 4.8% drop from November 2024.
A reversal from early-year optimism
The downturn marks a significant reversal from the optimistic outlook at the start of 2025. In January, Cox Automotive projected full-year sales of 16.3 million vehicles, expecting a 2–3% increase over 2024 due to improving economic conditions and better buying environments.
That projection collapsed after President Donald Trump introduced sweeping tariffs. In March, the administration imposed 25% tariffs on imported vehicles and parts, followed by 50% tariffs on aluminum and steel. These materials are used in most domestic models, meaning the tariffs hit both imported and U.S.-built cars.
Although many automakers initially avoided raising sticker prices, J.P. Morgan Global Research estimated in September that the combined tariffs on vehicles and parts would cost the industry around &41 billion in the first year.
The burden is expected to fall evenly on automakers and consumers, adding an estimated 3% to new-vehicle price inflation.
Winter outlook for car shoppers
The pressure is already visible. EV sales have plunged since a key tax credit expired in September. Cox data shows U.S. EV sales dropped to 74,835 units in October, down 49% from September’s record and 30% lower than a year earlier.
Meanwhile, prices continue drifting higher as tariff-affected inventory replaces older stock. Analysts expect automakers to rely on ‘tactical discounting’ through year-end promotions, but Keating notes that many households are simply ‘payment-fatigued’ and unwilling to stretch further.
The average transaction price for a new vehicle in October was $49,766, up 2% from a year earlier, according to Kelley Blue Book. Cox Automotive and Moody’s Analytics reported that new-vehicle affordability worsened for the third straight month in October, following a low point in September not seen since late 2024.
Incentives were sharply reduced in October, providing little relief for buyers already facing rising prices, higher interest rates, and fewer subsidies, particularly in the EV segment.
Analysts warn that, heading into winter, consumers will continue to face the same core challenge: it now takes more weeks of income to afford a new car than at any point in the past year.
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