New-vehicle average transaction prices (ATPs) remained relatively stable in March according to Kelley Blue Book’s March 2025 report. In fact, the prices decreased slightly from February, despite the looming impact of tariffs.
The report comes as the automotive industry is in a state of uncertainty, with price increases expected in the coming months. However, these concerns did not affect pricing in March and even led to an increase in sales.
Here’s a breakdown of the entire report’s key findings as auto dealers continue to navigate the changing landscape.
Prices Hold Steady
ATPs in March sat at $47,462, a slight decrease from February’s revised ATP of $47,577. Annually, March ATPs were higher by less than 1 percent. As prices held steady, sales incentives did as well at 7 percent of ATP. However, this is still a 5 percent increase from March 2024. Overall, incentives have remained relatively stable for the last year, peaking at 7.9 percent in late 2024, but averaging about 7.1 percent.
The Luxury Car segment offered the highest incentives, followed by Compact SUVs and Full-Size Pickups. Meanwhile, shoppers searching for Small/Midsize Pickups or Luxury SUVs faced relatively lower incentives, often under 5 percent of ATP.
While average prices were steady, some brands saw considerable changes year-over-year. Luxury brands like Infiniti and Porsche reported the largest price increases at 18.9 and 11.5 percent respectively. On the other hand, Jeep (-10.6%), Ram (-5.8%), and Mercedes-Benz (-4.7%) showed notable decreases in pricing.
Spike in Sales Ahead of Tariffs
March recorded a major uptick in vehicle sales with 1.59 million units sold, marking the highest monthly sales volume in four years. That’s a 30% jump from February, largely attributed to consumers rushing to purchase vehicles ahead of potential price hikes tied to the new 25% tariffs on imports.
Vehicles under $30,000, which are especially vulnerable to tariff impacts, made up 14% of U.S. sales in March. This includes models such as the Honda HR-V and the now-discontinued Mitsubishi Mirage, which boasted an ATP under $20,000. Prepare to see shifts in inventory demand as tariffs begin driving up the prices of imports in this segment.
“All signs point to higher prices this summer, as existing ‘pre-tariff’ inventory is sold down to be eventually replaced with ‘tariffed’ inventory,” said Erin Keating, Executive Analyst at Cox Automotive. “How high prices rise for consumers is still very much to be determined, as each automaker will handle the price puzzle differently.”
Electric Vehicle Pricing Continues to Climb
An outlier from the average, electric vehicles (EVs) saw a significant price increase in March. With an estimated ATP of $59,205, EV prices are up 7% year-over-year and remain approximately 25 percent higher than the industry average. EV-specific incentives declined slightly from February, amounting to 13.3 percent of ATP, while the price increased by more than $2,000 from February’s ATP of $57,015.
Tesla had an ATP of $54,582 for March, an increase of 3.5 percent year over year. Q1 sales were down an estimated 8 percent year-over-year, mirroring a broader decline in Tesla sales since 2023.
Preparing for Tariff-Driven Changes
These March numbers represent a nice bit of stability among a constant stream of future speculation. However, now that the import tariffs are firmly in place as of April 3, dealers should be ready for increases in ATP in the following months.
“Should the White House posture hold, our team is expecting new vehicles directly impacted by the 25% tariff to see price increases in the range of 10-15%,” said Keating. “In addition, considering the market dynamics, we also anticipate seeing at least a 5% increase in prices of vehicles not subjected to the full 25% tariff. There is no way around it: Tariffs are going to push new-vehicle prices higher in the U.S.”
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