Hold Onto Your Butts: New Cars Are About To Get Even More Expensive

Media outlets are loudly trumpeting a new prediction by economists that new car prices could increase by as much as 25 percent thanks to tariffs threatened by President Trump. That’s not welcome news for most Americans who already can barely afford the cars that are sitting on dealer lots. But there’s more to this story than what’s being thrown around.

You could get a deal on a new C8 Corvette.

First off, the 25 percent increase is thanks to a threatened tariff that could go into effect on April 2. But President Trump might not follow through, as he hasn’t pulled the trigger on other tariff threats. Then again he could, but that might not be a bad thing in the long run.

After all, some automakers have begun shifting production to the US. That brings jobs and helps to boost the domestic economy. But there’s something deeper in this story we don’t see getting any focus.

As we pointed out before, auto loan delinquencies are soaring and one factor contributing to this is the crazy inflation of new car prices. Back in December 2022 the problem hit its peak with the average new vehicle transaction price reaching $49,929, according to Cox Automotive.

But prices haven’t deflated much since then with the average for January 2025 reaching $48,641. Compare that to the median wage and you’ll see how crazy new car prices are for most Americans.

Looking more specifically at a popular model line, the Honda Civic, illustrates the selective focus of the media as prices could spike again. None of them are noting that a base 2025 Honda Civic has an MSRP starting at $25,345 compared to a 2019 starting at just $19,550. That’s a 29 percent price increase, more than what tariffs would tack onto some new cars, so where’s the media hyperventilation?

But wait, it gets even better. A 2014 Honda Civic had a base MSRP of just $15,455. Compared to the 2025 base Civic, that’s a 63 percent price increase! It’s no wonder American families feel squeezed right now.

Everyone can debate about why car prices have climbed so steeply in the past decade (we see several factors contributing to it) but the fact that’s brushed aside for pearl clutching about tariffs seems a little too selective for our tastes. Something needs to change, because what’s been going on is absolutely not working for the average American.

Image via Lexus