As 2025 winds down and car shoppers seek end-of-the-model-year deals, they will likely be disappointed. Analysts say car buyers will only find small discounts as the prices of new cars continue to rise.
Brian Moody, Autotrader’s executive editor, told Fox Business that the average price for a new car purchased in August was 2.6% higher compared to 2024. Looking ahead, he said, “except on a few models, big discounts will be increasingly hard to find.“
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Effects of tariffs
Edmunds agrees. One of their top managers says car prices are feeling the pressure of the new tariffs and, as a result, car buyers should not expect deep discounts. Jessica Caldwell, Edmunds’ head of insights, said “shoppers should expect automakers to be cautious in how they manage pricing and incentives.”
In April, President Trump imposed a 25% tariff on all imported vehicles. Trump then added another 25% levy on imported auto parts such as engines, transmissions, power-train and electrical components, pushing the cost of a new vehicle even higher.
Increased car payments and financing
Edmunds recently revealed that new car financing hit record highs in the second quarter of this year as “shoppers stretched their budgets to manage ongoing affordability challenges.”
The online automotive resource company also found that bigger loans are becoming more commonplace, with new vehicle buyers putting less money down and financing an average of $42,388 per purchase. Edmunds also discovered that nearly 20% of new car buyers commit to a monthly payment of $1000 or higher.
Less supply
The top analyst at cars.com, David Greene, adds that limited supplies are pushing prices up. He says new car inventory is down 6% from one year ago, reducing the need for dealers to offer deep discounts. He says waiting until the end of the year might not be a good strategy this year because once the 2025 model year cars are gone, they are gone.
He said, “Once those are gone, shoppers should expect to pay more as tariffs and limited supply push prices higher.”
Electric vehicles are the exception
One possible exception when it comes to discounts could be electric cars, as buyers can still get a tax credit to reduce the upfront cost of an EV, but only through the end of September.
