United States all car sales (May): $USD actual 2.58M, previous 2.89M

United States all car sales (May): $USD actual 2.58M, previous 2.89M

Rising tariffs have significantly impacted the U.S. automotive market, driving up prices for both new and used vehicles. According to recent data from CBT News, the average new car price reached $49,530 in April, marking a 0.8% year-over-year increase [1]. This surge is attributed to a dwindling pre-tariff inventory and automakers raising prices in response to increased import costs.

The demand for new cars has been robust, with sales surging to 17.8 million in March and 17.3 million in April. However, the supply of new vehicles has been constrained, particularly for affordable models. Inventory on dealer lots declined by 5.2% from April to May, despite a 3.7% year-over-year increase in April [1].

The used car market is also facing challenges. Reduced production during the COVID-19 pandemic and a decline in lease returns have led to a shortage of used inventory. As a result, many listings consist of older vehicles with higher mileage. Trade-in values have risen significantly, with a $820 year-over-year increase in April, the first such increase since 2022 [1].

The current situation has led many shoppers to turn to the used car market as an affordable alternative to increasingly expensive new models. However, financing offers have not eased the pressure. Despite a 1% interest rate cut by the Federal Reserve in late 2024, new-car loan rates have grown more expensive, with the average APR rising 0.08% from Q3 2024 to April 2025 [1].

In May, U.S. car sales stood at 2.58 million units, a decrease from the previous month's 2.89 million units. This decline is likely due to the combination of higher prices and constrained inventory [1].

References:
[1] https://www.cbtnews.com/tariff-fueled-shortage-drives-up-new-and-used-car-prices-across-the-market/