Car prices have not gone up significantly thanks to tariffs just yet. But with next year’s models hitting showroom floors, American car buyers will see how much longer that can last.
New car prices haven’t changed much this year, despite 25% tariffs on most imported cars and parts, which are used to assemble American-made cars. Data from car buying site Edmunds found the average car price in July rose less than 2% from March, just before the tariffs took effect. They’re also not much higher than a year ago.
But a large reason for that is because not as many people have been buying cars in general.
Americans rushed to buy cars in March, fearful costs would skyrocket. That hurt sales later in the year, as did worsening consumer confidence and continued high interest rates. Automakers have been eating the cost as a result, concerned higher prices will further cut into demand.
But with 2026 models starting to arrive on dealers’ lots, many experts expect prices to finally rise. Automakers can blame elevated prices on the new model year, not tariffs.
Any price bump is expected to be moderate, however, and not large enough to cover the billions in tariff costs.
Market demand will determine car prices, said Ivan Drury, director of insights at Edmunds, rather than the costs associated with producing the vehicle.
“They already had issues selling the inventory they have on hand, let alone if they raised the price by more than 10%,” Drury said.
Automakers traditionally raise prices when new model years roll out. Edmunds data reports that the manufacturer’s suggested retail price (MSRP), or sticker price, for 29 of the 45 models already at dealers is higher than last year.
Many of the increases are modest, rising 2% or less when compared to 2025 models. But some larger jumps include both imported and domestic cars.
The Chevrolet Traverse and Cadillac CT5, both up more than 7%, are assembled in Michigan. The biggest increase is for the imported MINI Cooper, rising 11.4% even with a US-UK trade deal capping tariffs on UK-built cars at 10%.
But higher costs will not always be apparent in the sticker on the window of new cars.
“The sticker price is the last place they want to put the increase,” Drury said.
Instead, car companies will find less obvious ways to raise costs, like charging buyers more for options, offering fewer standard options or reducing the incentives to attract buyers. They also can increase fees, such as “destination charges.”
Destination charges, a non-negotiable fee that covers the cost of transporting a car to the dealership, averaged $1,500 for 2025 model year cars, according to Edmunds. That’s up 8.5% from model year 2024 cars, and more than 25% higher – or $300 more – than the 2021 models.
Those charges are likely to see a big jump again this year, according to experts, since fees are generally not factored into the cost by Americans shopping for cars.
But no matter how the automakers try to bring in money to help cover the cost of tariffs, they don’t have the final word on cost. The actual sale price is set in negotiations between buyers and dealers, not by the automakers.
Uncertainty over tariffs and trade rules
Uncertainty over trade is also likely keeping automakers from raising the MSRP too high, too quickly, according to experts. The companies need the finished trade specifics with the EU, UK, Japan, South Korea, Canada and Mexico to know what their final costs will be.
“I think we’re likely going to see a little bit more of spreading out the pass through of tariffs costs to consumers than what we initially thought,” said Kevin Roberts, Director of Economic and Market Intelligence at CarGurus. “It could just be a situation of waiting to see if trade policy shifts more.”
The automakers won’t comment directly on their pricing plans. But the comments companies have made publicly and in response to CNN questions note that they consider numerous factors when setting pricing, including market conditions, vehicle content, and the competitive landscape. None have mentioned tariff cost.
That’s not a surprise. Automakers, like many companies, are concerned they could anger President Donald Trump by admitting any tie between price increases and his tariffs, especially as they lobby the administration behind the scenes on tariff policy and regulations that would be favorable to the industry.
“It’s probably 50-50, 50% on not wanting to upset the administration, and 50% the market reality,” said Erin Keating, executive analyst with Cox Automotive. “The market is keeping the prices in check as much as concerns (about administration reaction), absolutely.”
