Tariffs, Expiration of Programs Will Push Marketed Levels Higher Beginning in June
Throughout the month of February—before the rhetoric around tariffs began to heat up and start to move toward reality—the Average Marketed Price of new vehicles had settled in at around $48,500. But as has been well documented, those levels began to ratchet up in March as OEMs (and dealers) became less aggressive with their incentives and discounts as a way of dealing with the uncertainty of what was to come. The promoted price seen by consumers increased by almost $1,500 by mid-April and have remained elevated since then.
In the latest week, the Average Marketed Price fell below $50,000 for the first time in five weeks. The cost premiums, however, are down by just $151 compared to early May. Still, the crossing of the psychological $50K barrier raises questions about whether we have seen the pricing peak and are heading down to lower levels again.
The short answer is no. The initial impact of the tariffs, which remains firmly in place despite the recent small pullback, is being muted somewhat by OEMs that are marketing their pre-tariffed inventory at stable or even reduced prices. Take the example of Ford, which has been aggressively positioning itself as producing more vehicles in America than any other manufacturer and touting its employee pricing for all consumers since early April.
Pricing trends for its major models/trims shows that Ford is putting its money where its mouth is, with noticeable decreases since the program started.
Ford’s program, however, has a deadline—July 4—at which time prices are likely to head upwards again. And price increases for the Bronco Sport, Maverick, and Mustang Mach-E, which are manufactured in Mexico, have already been announced and enacted for vehicles built after May 2.
Other OEM programs also have expiration dates, while other manufacturers have hedged their stance on stable pricing. Hyundai’s Customer Assurance Program, which has kept prices stable, comes to an end on June 2, for example. And General Motors, which faces up to $5 billion in additional costs due to various levies, has indicated that it will take a measured approach to pricing, with market and competitive dynamics factoring into their future actions.
Some manufacturers have already begun to contend with higher costs by raising prices. In addition to the aforementioned Ford models, Subaru has announced that it is increasing MSRP on several popular models in its lineup, citing “current market conditions” and anticipates that it will begin to affect prices in its showrooms beginning in June.
With pricing programs ending, pre-tariff inventory dwindling, and select makes and models already implementing increases, this moment is shaping up not as a plateau, but as a pause.
One thing is nearly certain: temperatures won’t be the only thing rising this summer.
