When the Trump administration initially signaled that it would be pursuing steep tariffs on materials, parts, and vehicles, many industry watchers estimated that the resulting price increases would migrate into the $10,000-$15,000 range.
It is true that Average Marketed Prices, which had declined to a pre-tariff and multi-year low of $48,544 on February 24 of this year, quickly surpassed $50,000 in anticipation of higher costs. But the ensuing months have proven to be a new plateau rather than a jumping-off point to significant increases.
While the projected pricing apocalypse related to tariffs has not materialized, it is important to put this most recent year into a broader historical perspective. From 2018 to 2020, the Average Marketed Price of a new vehicle resided in a narrow range between $36,000 and $38,000.
When pandemic-related chip shortages and broader supply chain issues took effect, however, prices rose by close to $15,000, hitting an all-time high of $51,824 of July 7, 2023.
Since then—with inflation, the discontinuation of lower-end models, and an OEM focus on higher contented trims-–consumers have had to contend with average prices hovering near $50,000.
To put this into real world context, consider a prospective car buyer who is replacing a vehicle they bought six years ago. With prices, interest rates, and down payments all markedly up, the financial outlay required to secure the same model and trim has increased substantially. Talk about sticker shock!
Now imagine if the 20-25% tariff effect were to have been added in. With prices already so elevated, that level of pass-through would very likely bring new vehicle sales to a grinding halt. It is no wonder that OEMs are looking for ways to mitigate the increases that are being passed along to consumers.
* Assumes a 4.61% interest rate in 2019 vs. 7.27% in 2025 on a 60-month loan
Another note of caution for OEMs is the trend in used vehicle movement, which hit a long-term high in March 2025—exactly when tariff rhetoric began to heat up and new car prices accelerated—and almost matched it again in August. It is clear from these trends that consumers see this market sector as a viable choice at a time when new vehicle prices—while not rocketing upwards as much as expected—remain well above historical levels.
The worst-case tariff scenario may have been avoided, but that doesn’t mean the road ahead is smooth. With new car prices hovering near record highs and used vehicles gaining ground, it’s clear that affordability remains top of mind for consumers.
For OEMs, the challenge now is to recalibrate—not just for profitability, but for accessibility. Because if $50K is the new normal, the industry’s next great innovation may not be technology—it might be figuring out how to build value back into the middle of the market.
