After a robust start to 2025 driven by consumers rushing to buy before new tariffs, U.S. car sales have begun to decline. March saw new vehicle sales at a seasonally adjusted annual rate (SAAR) of 17.5 million, but by May this pace had slowed to 15.6 million, with June expected to dip further to 15.3 million. The pre-tariff buying spree led to a 9.1% year-over-year sales jump in March, but growth slowed to just 1.4% in May as the market cooled. Total new vehicle sales for the first half of 2025 reached 8.1 million units, up 3.1% from last year, but June sales fell 5.8% compared to June 2024.
Average transaction prices (ATPs) remain elevated, now at $48,799—about $4,800 higher than inflation-adjusted pre-pandemic levels—with incentives dropping to 6.8% in May, down from 8% in December and well below pre-pandemic norms. The most pronounced impact is on vehicles under $30,000, such as the Chevrolet Trax and Nissan Sentra, which are primarily imported and face the steepest price increases from tariffs. Analysts warn that if tariffs persist, entry-level models may disappear from the market, and overall sales for 2025 are now forecast between 15.6 and 16.3 million, down from earlier estimates.