Amid heightened efforts by some car manufacturers to offer significant Black Friday and year-end incentives, many industry experts remain skeptical about whether these discounts will be enough to counteract the consumer fatigue caused by rising new car prices.
With new vehicle sales expected to decelerate, more consumers are opting to keep their current cars longer or turn to the used vehicle market. This shift is anticipated to persist through the end of the year and extend into the next.
“As long as interest rates remain high and uncertainty remains in policy, affordability will be a challenge,” Erin Keating, an executive analyst at Cox Automotive, told the Detroit Free Press on Dec. 1.
Industry forecasts suggest a notable decline in November’s new vehicle sales compared to the same period last year. This prediction is based on reduced government subsidies for electric vehicles and the overall rising costs of new cars.
According to Cox Automotive, November’s sales volume is projected at 1.27 million new cars sold in the U.S., representing a 1% decrease from October and a significant 7.8% drop from the previous year. J.D. Power offers a slightly different perspective, estimating retail sales of 1,058,500 new vehicles for November, marking a 4.8% decline from November 2024.
The auto industry’s sharp U-Turn in 2025
At the beginning of the year, the auto industry seemed poised for modest growth, with predictions of positive economic conditions bolstering U.S. auto sales. Cox Automotive initially forecasted new vehicle sales would reach 16.3 million by the year’s end, anticipating a 2%-3% increase over 2024 sales.
However, the landscape shifted dramatically when President Donald Trump introduced tariffs. A 25% tariff was imposed in March on imported autos and auto parts, which are crucial to many domestically made vehicles. Additionally, a 50% tariff was placed on aluminum and steel, materials used in most U.S.-produced cars.
While many automakers initially refrained from raising prices, J.P. Morgan Global Research projected that the tariffs would cost the industry approximately $41 billion in the first year. This burden is expected to be shared by automakers and consumers, potentially leading to a 3% increase in new vehicle price inflation.
What it could mean for car shoppers this winter
- Electric vehicle (EV) sales have significantly declined since tax credits ended in September. Cox data indicates that October’s estimated new EV sales in the U.S. were 74,835 units, a drop of 49% from September’s peak and down 30% from the previous year.
- As tariffed vehicles replace non-tariffed stock, prices continue to rise.
- Consumers might encounter “tactical discounting disguised as ‘year-end events,” according to Keating, while the real issue remains payment-fatigued buyers who are unwilling to stretch their finances further.
Bottom line: It takes more weeks of work to buy a car
In October, the average transaction price for a new vehicle, including all incentives and trade-ins, reached $49,766, a 2% rise from October 2024, according to Kelley Blue Book.
The Cox Automotive/Moody’s Analytics Vehicle Affordability Index reported a drop in new-vehicle affordability for the third consecutive month in October. September marked the lowest point for new-vehicle affordability since December 2024, and October saw no improvement as automakers significantly reduced incentives.
Original Story at www.usatoday.com