Kelley Blue Book's May Report: Steady New-Vehicle Prices Amid Tariff Pressures

Kelley Blue Book's Recent Findings on New Vehicle Prices



In the latest report released by Kelley Blue Book, a trusted source for automotive valuations, the average transaction price (ATP) of new vehicles in May 2025 showed remarkable stability, barely shifting from the previous month. The ATP remained at $48,799, indicating a slight decrease from April’s adjusted ATP of $48,811. In a year-over-year analysis, the ATP saw a mild increase of 1.0% compared to May 2024.

The sales landscape for new vehicles experienced a notable slowdown, with the sales pace dropping to 15.6 million units in May from a more robust 17.3 million in April. Though the reduction in sales was evident, new vehicle incentives also reflected a slight increase, moving from 6.7% of ATP in April to 6.8% in May, signifying an increase of $3,297 on average. When compared to May of the previous year, the incentive levels remained relatively consistent, indicating a degree of stability amidst fluctuations.

Interestingly, many automakers are taking a conservative approach towards incentive spending. Notable reductions were observed from brands like Volkswagen, Mazda, Land Rover, and BMW, with each cutting their incentive allocations by over 10%. On the other hand, companies like Tesla, Toyota, and Nissan opted to increase their incentive strategies, even as Toyota maintained an overall lower incentive rate compared to the industry average.

The manufacturer's suggested retail price (MSRP) for new vehicles has also seen a slight increase, moving to $50,968, marking it as the highest point recorded in 2025 thus far. This figure represents a year-over-year increase of 2.1%, although the long-term average growth in the MSRP remains higher at 3.5%. The peak MSRP previously noted occurred in December 2024.

When looking closer at vehicle segments, prices remained steady in popular categories such as Compact SUVs and Mid-size SUVs, with the Compact SUV segment still leading in sales at an average price of $36,515 paid by consumers. The average incentive in this segment has slightly risen to 8.0% of ATP in May, reflecting ongoing competitive dynamics within the market.

On the performance of luxury vehicles, there were notable increases observed in categories like Sports Cars and Luxury SUVs, indicating targeted demand shifts. Light trucks also showed price growth, with averages climbing to $42,062, despite a slight decrease in incentives.

Market Forecast and Expert Commentary



Erin Keating, an Executive Analyst at Cox Automotive, commented that while uncertainties stemming from tariff policies are influencing the landscape of the new vehicle market, price levels are proving to be resilient. She emphasized that automakers are striving to keep vehicle prices in check, responding to inflationary pressures while also safeguarding dealer profitability amidst rising costs.

Kelley Blue Book’s reports about electric vehicles provided additional insights into the evolving EV market. The average ATP for new electric vehicles in May was estimated at $57,734, reflecting a decrease from $59,123 in April, along with an overall annual price drop of 1.1%. Additionally, EV incentives saw a significant uptick, increasing from 11.6% of ATP to 14.2%, indicating heightened efforts to improve EV affordability at a critical interface of market transition.

Tesla's average transaction prices have also edged downward, settling at $55,277 in May, which is lower than the previous year. Notably, the Model Y—the best-selling EV in the U.S.—saw a 2.9% drop in average pricing.

In summary, Kelley Blue Book’s report from May presents a complex but manageable landscape for new vehicle prices, highlighting manufacturers' concerted efforts to stabilize costs and incentives in the face of external tariff pressures. As the automotive market continues to evolve, consumers are advised to stay informed about pricing trends and incentives that can impact their purchasing decisions moving forward.

About Kelley Blue Book


Founded in 1926, Kelley Blue Book has built a legacy of being a reliable source for vehicle valuation and information, offering consumers and industry professionals alike essential insights into the automotive market.

Topics Auto & Transportation)

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