The April Consumer Price Index (CPI) report revealed new car prices were flat, a surprise as many felt President Trump’s auto sector tariffs would boost prices. But inventory at dealerships may have shielded car buyers from tariff price hikes, at least for now.
In April, new vehicle prices came in at no change from the previous month and up 0.3% year over year. Used vehicle prices were down 0.5%, and up 1.5% from a year ago.
The report comes on the heels of Trump’s 25% foreign-made auto tariffs that began on April 3, affecting not only European and Asian manufacturers but also Big Three automakers GM (GM), Ford (F), and Stellantis (STLA), which import vehicles from Canada and Mexico, as well as a few models from China.
The expectation was for new vehicle prices to climb higher, reflecting the passing of tariff costs on to consumers, as well as a concurrent hike in used vehicle prices as buyers shifted to preowned vehicles.
Read more: April inflation breakdown: Food, shelter, and medical care pinch consumers’ wallets
A big reason price hikes were minimized could have been dealers and automakers eating into their preexisting new car inventory, which includes imports that were not tariffed. Dealers were not shy about promoting tariff-free inventory to buyers as a sales tactic in the competitive new car sales landscape.
Not surprisingly, the number of cars on the lot is shrinking.
Vehicle data and buying site CarPro reports that overall industry stock in April dropped to 2.6 million vehicles from around 3 million, with days of supply falling to just over 60.
The average is around 70 days of supply, CarPro said, with different manufacturers maintaining different levels. For instance, Toyota (TM) has around 10 to 15 days of supply, whereas GM maintains around 50 to 60 days. Stellantis, during its troubled summer of 2024, had over 100 days’ supply in the US, though that has come down substantially.
Meanwhile, Hyundai (up 19%), Honda (up 17%), Ford (up 15%), and Toyota (up 8%) saw huge sales gains in April. (Note: GM and Stellantis do not report monthly sales.)
Another reason why prices may have stayed unchanged is that several automakers, including Hyundai, guaranteed pricing through the end of May, CarPro said. The firm also said shipments will soon be tariff-exposed, and further supply and pricing pressures are expected in the weeks ahead.
The question is how long the automakers can hold the line on prices.
“Across OEMs, we continue to monitor post-tariff reactions, with GM saying that it will not raise prices across the board but continue to see consistent pricing (up 0.5%-1.0% for the year), and Ford extending employee pricing on most vehicles until July 4 (vs. June 2 previously) while hiking prices on Mexico-built vehicles,” Deutsche Bank’s Edison Yu wrote in a note Tuesday morning.
Kelley Blue Book (KBB), which tracks average transaction prices (ATP) at the dealership level, actually saw prices climb 2.5% month over month in April, more than double the average monthly move in April.
A KBB spokesman told Yahoo Finance that timing and different data sources may have led to the deviations between KBB’s numbers and the government’s CPI reading. CPI data may be a bit older than KBB’s, the spokesman said, meaning CPI data may be more of a trailing indicator than KBB’s.
With tariffs on foreign-made autos still on the table, prices are expected to rise, meaning April’s lack of change in pricing may be a blip.
As Deutsche Bank noted above, Ford is already raising prices on its Mexican-built Ford Maverick, Bronco Sport, and Mustang Mach-E EV.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram.
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