By Steven Symes 
After much hand-wringing and scary talk about new car prices skyrocketing thanks to tariffs, the figures for May show they actually went down slightly. That’s right, instead of climbing 25 percent like some people loudly declared, or even just five percent, we saw a slight decrease.
These used cars lost the most value.
That’s according to data from Kelley Blue Book, which found for the month of May 2025 the average transaction price for a new car was $48,799. We still think that’s way too high, but it’s slightly lower than what it was for April, $48,811.
Also interesting, Kelley Blue Book found the pace of sales last month dropped quite a bit. The seasonally adjusted annual rate was at 15.6 million, a decrease from 17.3 million in April. In other words, people really are pulling back from the new car market.
There could be a lot of reasons for this. Layoffs and job uncertainty could play a factor. So could the fact inflation has increased the cost of so many essentials, people don’t want to take on a new car payment.
Then there’s the ridiculous new car prices. They haven’t really come down since they climbed during the covid shortages and for some model lines, the prices seem to just keep dialing up. Anecdotally, we know a lot of people who say as long as this is “the new normal” they’re never going to buy a new vehicle again.
With the real estate market turning, that too could be impacting new car sales. Whether you think it’s a smart financial move or not, some were tapping their house’s equity to finance a vehicle purchase.
But it seems with property values deflating rapidly in certain areas, that’s not going to be an option. Perhaps automakers will be forced to also adjust their prices? We can only hope.
Image via Berto Sandoval/Facebook Marketplace