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US new-vehicle prices rose 2.5% in April, Cox Automotive

reports

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Tariffs on imports from Mexico and Canada impact automaker

costs

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Consumer demand rises as buyers anticipate tariff-related

price

hikes

By Kalea Hall

DETROIT, May 12 (Reuters) - U.S. new-vehicle prices

surged in April, data released on Monday showed, a sign that the

effects of President Donald Trump's auto-tariff measures are

rippling through the car market.

The average price consumers paid, after discounts and

promotions, rose 2.5% from March, more than double the typical

1.1% increase over those two months in recent years, Cox

Automotive's Kelley Blue Book showed. In the past decade, the

only larger such increase was in April 2020, when prices rose

2.7% during pandemic-related factory shutdowns.

Automakers are adjusting to 25% U.S. tariffs on vehicle

imports from many countries, including major trading partners

Mexico and Canada, but few have raised sticker prices. Some,

like Hyundai, Ford and Jeep-maker Stellantis ( STLA )

, have even rolled out deals to reassure buyers and

keep sales flowing.

Still, consumer demand has risen over the past few months as

buyers rush to get ahead of any tariff-related price increases,

dealers and auto executives have said. That has translated into

new-car shoppers shelling out more on average at dealerships,

according to Cox.

Yet even if carmakers hold prices steady, consumer

expectations that tariffs will eventually send prices higher

likely led to inflation on certain models, said Cox executive

analyst Erin Keating.

"Those models got more demand, and therefore the local

pricing dynamics at the dealership level likely helped those

prices go higher."

Ford is charging more for its Mexico-built products, Reuters

first reported last week. Some models of the Mustang Mach-E

electric SUV, Maverick pickup and Bronco Sport will cost as much

as $2,000 more, according to a notice sent to dealers.

Wholesale used-vehicle prices rose in April, according to

Cox's Manheim Used Vehicle Value Index, which increased 4.9% to

208.2 from a year ago, up 2.7% from March.

Promotions have kept prices steady overall, some automakers

said.

Consumer-incentive programs are still very strong, said Todd

Szott, dealer partner at Szott Automotive Group, which has Ford,

Stellantis ( STLA ) and Toyota ( TM ) dealerships in Metro Detroit. "Pricing is

fairly stable at this point."

Sales incentives on new cars as a percentage of transaction

prices, a measure of discounts and promotions, fell to the

lowest since the summer of 2024, Cox said.

A dip in the number of vehicles sitting on dealer lots could

point to upward pressure on prices in coming months.

On a recent webinar with the Automotive Press Association,

Cox Chief Economist Jonathan Smoke noted that fewer than 2.6

million vehicles are on dealer lots, and that supply could fall

even further as sales surge and importers reduce deliveries.

Paul Zimmermann, partner-owner at Matick Automotive Group of

Michigan, which owns GM and Toyota ( TM ) stores, said vehicle stocks

are getting lighter in some areas after a robust April.

"I do have some concerns just in terms of the pipeline," he

said. "It's running healthy right now, but we need to make sure

that there's no blip."

Cox previously estimated new vehicles directly affected by a

25% tariff could cost 10% to 15% more, while the prices on

vehicles not affected by the full tariff could rise 5%.

Keating does not expect double-digit percentages soon, but

maybe over the long term. Automakers may use model-year

changeover time in the summer to adjust prices, she added.