U.S. Auto Market Slows Down After Tariff-Driven Buying Surge

New car sales in the United States dropped significantly in June 2025, following a short-lived boost driven by anticipation of new tariffs on imported vehicles. In April, the market reached a seasonally adjusted annualized rate (SAAR) of 17.6 million units, but by June, that figure had fallen to around 15 million, according to data from Cox Automotive and JD Power.

This decline came after a surge in purchases from March to May, when many consumers rushed to buy vehicles before the new 25% tariffs on imports from China, Mexico, and the European Union took effect. The goal was to avoid expected price increases, which have already started appearing at dealerships.

As of June, the average price of a new vehicle in the U.S. stands at $48,799  up 1% from the previous year and 28% higher compared to pre-pandemic levels in 2019, according to The Wall Street Journal and New York Post. With the tariffs now in place, prices are expected to rise by an additional $2,000 to $5,700 per unit.

Beyond pricing, economic uncertainty has also contributed to the sales slowdown. In May, consumer spending on vehicles dropped by 3.5%, according to figures from the U.S. Department of Commerce. At the same time, the average monthly car payment reached $747, with loan terms extending up to 84 months.

Several automakers reported mixed results. Toyota posted gains in the second quarter but showed signs of stagnation in June. Electric vehicle maker Rivian recorded a 22.7% drop in deliveries compared to the previous quarter, affected by the new trade environment.

Market forecasts have also been revised downward. Cox Automotive lowered its annual sales projection to 15.7 million units for 2025, down from the earlier estimate of over 16 million.

In summary, the U.S. automotive market has entered a new phase, characterized by higher prices, limited financing capacity, and demand settling after the initial tariff-driven rush.