US Car prices could soon move higher, and this time the reason is not just supply shortages or high demand. Tariffs on imported parts and vehicles are adding billions of dollars in extra costs for carmakers, and the pressure is slowly building. For buyers, this means that new cars may quietly become more expensive over the next year.
Why US Car Prices Matter Now
Over the past few years, American car shoppers have seen a rollercoaster of price changes. Then came tariffs introduced during the Trump administration, which added fresh costs to imported cars and auto parts.
Car buyers in the United States have been keeping a close eye on prices over the last few years. After the pandemic, both new and used cars became more expensive. Many people expected another round of price hikes when tariffs introduced by the Trump administration added billions in extra costs for automakers.
Surprisingly, carmakers held back. Instead of passing these costs to buyers immediately, companies like General Motors, Ford, Toyota, and Hyundai absorbed much of the hit. But now, as it becomes clear that tariffs may not go away soon, the pressure is mounting. Analysts and dealers believe US automakers’ car prices are about to inch higher.
Why US Car Prices Haven’t Jumped Yet
Normally, higher costs from raw materials, logistics, or tariffs show up quickly in the sticker price of a car. Yet between March and August 2025, the average manufacturer’s suggested retail price (MSRP) for new cars in the US rose by less than 1%, according to data from Edmunds. Even the 2026 model-year launches brought only modest increases of about 3.3%, close to the usual yearly bump.
Automakers held back because:
Automakers worried that customers, already stretched by higher living costs, would stop buying if prices rose too fast.
Executives feared public backlash, especially after former President Trump criticized other companies like Amazon and Walmart for raising prices due to tariffs.
The Growing Tariff Burden on Automakers
The numbers tell the story clearly:
General Motors expects up to $5 billion in tariff-related costs this year.
Ford estimates a hit of around $3 billion.
Hyundai North America reported a $600 million impact just in the second quarter of 2025.
Signs of Subtle Price Increases
While headline prices have not shot up, automakers are quietly passing some costs to buyers in other ways. For example:
Destination fees (the delivery charge to bring a car to a dealership) rose by 8.5% for the 2025 model year, now averaging $1,507. That’s the sharpest jump in a decade.
Certain models — like Ford vehicles produced in Mexico, Subaru imports, and luxury cars from Porsche and Aston Martin — have already seen higher sticker prices.
What Analysts Expect Next
Industry experts agree that prices will climb gradually through late 2025 and into 2026. Kevin Roberts from CarGurus predicts carmakers will focus more on higher-priced models, which naturally bring better profit margins. Former GM executive Warren Browne expects retail prices to rise even if that means a drop in overall sales.
Dealers report that popular high-volume models such as Ford F-Series pickups or Toyota RAV4s will likely see only small increases, while less visible trims and specialty models may get bigger adjustments.
So, Impact of Car Prices to Car Buyer
For everyday shoppers, the effect will depend on the type of vehicle:
Mass-market cars and SUVs from brands like Toyota, Hyundai, and Ford could see increases of around 1–3% over the next year.
Luxury models are more likely to face sharper hikes since wealthier buyers are less sensitive to price changes.
Extra charges like destination fees, financing rates, and dealer markups are expected to keep creeping up.
According to Cox Automotive, the average transaction price for a new car is already around $49,000, up nearly 30% since 2019. Another $2,000–$3,000 per vehicle could push some models out of reach for middle-class families.
Automakers Walk a Tightrope
Carmakers face a delicate balance. Raising prices too quickly risks losing customers, while holding back too long risks angering investors. At the same time, companies must invest heavily in electric vehicles, which require expensive research and development.
Hyundai’s CEO Randy Parker recently told Reuters that affordability remains a key goal, even though the company’s profits have taken a tariff-related hit. The message is clear: automakers want to protect market share, even if it means sacrificing some short-term profit.
What This Means for the Market
Gradual price increases could slow sales growth, particularly for entry-level vehicles. Automakers may also shift their focus to SUVs, crossovers, and luxury models, which carry better margins. Higher new-car prices could revive demand in the used-car market, where buyers may look for more affordable options. Electric vehicle adoption could also be affected, as tariffs raise costs on an already pricey segment.
Bottom Line
The question is no longer whether US car prices will rise, but when and by how much. Automakers have shielded buyers for now, but rising tariffs make future price hikes almost certain. If you’re planning to buy a new car, acting sooner rather than later might save you from the next round of increases.
Conclusion: Tariffs or Customers, Who Pays the Price?
The question no one can ignore is simple: Who will bear the cost of tariffs?
For now, automakers are absorbing much of it, but the gradual increase in US automakers car prices is unavoidable. Buyers may not feel it all at once, but over the next year, new models, fees, and financing charges will reflect these pressures.
If you’re planning to buy a new car, this might be the right time, before the next round of price increases rolls out with the 2026 models.
For more updates on US car prices, tariffs, and industry changes, you can check resources like Reuters, Cox Automotive, and Edmunds
FAQ’S
Q1. Why are US car prices expected to rise in 2025?
Tariffs on imported parts and vehicles are adding billions in costs for automakers, and companies are beginning to pass some of those expenses to buyers.
Q2. How soon will new-car prices start climbing?
Analysts expect gradual increases through late 2025 and into the 2026 model year as tariffs remain in place.
Q3. Will all cars become more expensive?
Mass-market sedans and SUVs may see only small bumps of 1–3%, while luxury models and specialty trims are likely to face sharper hikes.
Q4. What hidden charges should buyers watch for?
Destination fees are rising fastest, now averaging about $1,507, and dealer markups or financing rates may also inch higher.
Q5. Should I buy a car now or wait?
If you’re planning a purchase, buying sooner could save a few thousand dollars before 2026 price increases take effect.
🏠 Our Articles (Pickyourwheel.com)
Leapmotor B10 Review 2025: Affordable EV with Premium Feel
Toyota Land Cruiser EV & RAV4 EV: Bold Future of SUVs
U.S. Tariff on Japanese Cars: What It Means for Buyers