When Will New Car Prices Drop?

Quick Facts About New Car Prices

• The new vehicle average transaction price (ATP) in April was $49,461, up 1.8% from one year earlier. 
• April showed generally stable inventory levels and a small decline in overall volume as manufacturers work to rebalance inventory.
• For buyers, the situation hasn’t changed dramatically and the market is holding steady against strengthening headwinds.

If you’re in the market for a new vehicle, prices are continuing their steady increase. In April, the new-vehicle average transaction price (ATP) was $49,461. This number appears to be driven primarily by the high-volume SUV and pickup truck segments, where overall price growth remains below long-term averages.

Sales incentives declined slightly in April to 6.9% of ATP, down from 7.2% in March, but remained relatively flat compared to this time last year. It appears that tightening inventory levels as we head deeper into deep spring have kept incentive spending in check.

In short: The new-vehicle market wrapped up April with mostly stable inventory levels as manufacturers work to clear out model year (MY) 2025 vehicles. We didn’t see any dramatic shifts in pricing or supply, so car shoppers shouldn’t expect any major surprises at the dealer. Ongoing overseas conflicts continue to put pressure on consumers as prices rise and priorities shift. Read on for expert insights into what’s driving the current trends and what you need to know if you’re planning to start your search or buy a car now. 

• New Car Prices Continue Modest Increases
• New Car Inventory Update
• Shop Around for the Best Offer on Your Trade-in
• The Higher Costs of Car Insurance
• What to Expect: Looking Ahead

New Car Prices Continue Modest Increases

The new vehicle ATP in April was 0.7% higher than in March, a gain above long-term averages. April’s $49,461 ATP was up 1.8% year over year but still below the long-term average of approximately 3.6%. “What we’re seeing in April is a mix-driven pricing story, not reaccelerating inflation,” said Cox Automotive Analyst Erin Keating. “Strength in high-volume segments like SUVs and pickups is lifting the average, but overall price growth remains below long-term norms, signaling that the pricing environment is continuing to normalize.”

Sales volume in April declined from both the previous month and this time last year. Incentive spending also decreased month over month, from March’s 7.2% of ATP to 6.9% in April, but it was up modestly year over year, with April 2025 numbers at 6.8% of ATP. Segments with the highest incentive spending were EVs, luxury vehicles, full-size pickups, and compact SUVs.

It is important not to conflate pricing and the overall market. “While year-over-year price growth may be returning to pre-pandemic norms, the market itself hasn’t,” said Keating. “Today’s pricing is being supported more by supply discipline and mix than demand strength, which is why volume is absorbing more of the pressure.”

It’s important to remember that volume-weighted ATP reflects all market realities, including high-volume vehicles like pricey pickup trucks, which can influence the number. For example, full-size pickups averaged $66,705 in April, up 2.9% year over year. “Not every vehicle is a $50,000 purchase,” Keating noted. “Most of the volume still sits in segments priced below the industry average. The top five segments come in at around $44,000 on a weighted basis, and pickups account for a big share of that. Remove expensive full-size pickups, and the average is closer to $39,000, which tells a very different affordability story.”

MORE: Explore Kelley Blue Book’s Affordability Hub for curated articles designed to help you make smart, budget-friendly decisions.

The Electric Landscape Continues to See Headwinds

New electric vehicle (EV) sales continue to face headwinds, totaling an estimated 76,889 units in April. This number is down 23.1% year over year and 6.2% month over month, with EVs accounting for 5.6% of total new vehicle sales. Tesla led the pack with 37,550 units sold, lowering its market share to 48.8%, down from March. Chevrolet, Hyundai, Ford, and Cadillac followed in sales. Most manufacturers saw month-over-month declines, except Ford, whose EV sales rose 23.9% from March.

Inventory levels reflect the unsteady market. Overall days’ supply fell to 79 in April, and inventory sits more than 20% below levels this time last year, approaching the lowest readings we’ve seen so far in 2026. This suggests continued tightening rather than renewed oversupply. Inventory levels also vary widely by brand. Toyota, Hyundai, Mercedes-Benz, and Subaru saw leaner days’ supply in April, while Volkswagen, Nissan, and GMC maintained elevated inventory positions.

Average ATP for a new EV stood at $55,211 in April, a 1.4% month-over-month increase but a 4.9% year-over-year decline. Incentives averaged $7,640, representing 13.8% of ATP. Stronger sales and improved volume of higher-priced models, alongside declines among lower-priced, higher-volume brands like Toyota and Chevrolet, shifted the overall average higher. The EV price premium over ICE+ vehicles in April was $6,214, a modest increase from March’s $5,800.

“Following March’s rebound, April’s results signal a return to a more measured pace across the EV market,” said Cox Automotive Director of Industry Insights Stephanie Valdez Streaty. “Near-term volatility is likely to persist for new EVs as demand responds to broader softness in the new-vehicle market, evolving incentive strategies, uneven inventory positions and continued sensitivity to fuel prices. Tightening days’ supply suggests oversupply pressures continue to ease.”

What Drives New Car Prices

New Car Inventory Update

Dealerships track the number of new vehicles they have on hand to sell using a metric called “days’ supply,” or how long it would take them to sell out at today’s sales pace if they stopped adding new vehicles. According to Cox Automotive’s vAuto Live Market View, new car inventory data for April was relatively uneventful, with 78 days’ supply, mostly stable inventory levels, and a small decline in overall volume. This reflects automakers deliberately rebalancing inventory as they clear out 2025 model-year vehicles.

Total available inventory declined in April to 2.86 million units, down 1.1% from March but up 8.2% year over year. The decline suggests an effort to move older units. With steady sales velocity and targeted incentives, this appears to have been effective, with approximately 93% of total inventory being MY2026 product at the end of April.

Across key volume brands, April data shows well-managed inventory in most cases. “April’s inventory data points to a market that is neither tightening nor loosening materially but rather holding steady in the face of strengthening headwinds,” said Keating. “The sharp reduction in model year 2025 inventory, combined with steady pricing and modest improvements in days’ supply, reflects a coordinated effort to hold supply more in line with demand.”

What does this mean for car shoppers? The short answer is: probably not much. In the SUV and truck segments, prices remain on the uptick and demand remains high, so the landscape hasn’t changed much. Manufacturers appear to be managing inventory levels well, so you may feel less pressured to make a quick decision. Those shopping in other segments may not be able to drive a hard bargain, but some leeway is still possible.

Shop Around for the Best Offer on Your Trade-in

Trade-in value is another factor driving car prices. A lack of used-vehicle stock has kept those prices higher, giving credence to the idea that buying a new vehicle can sometimes be cheaper than purchasing a used model that’s only a few years old. As a result, it’s still a great time to trade in your car. 

Dealers value your trade-in partly based on what they need in stock, so if you have a popular model, you may be in luck. On the other hand, they’re more likely to offer an excellent deal to buyers on a car that fewer people are currently looking for. In other words, a car shopper trading a 2018 Honda Civic for something else may be much happier with the trade-in appraisal than a shopper with a 2021 Jeep Grand Cherokee. 

Car buyers should prepare to shop their trade-in around. It’s slightly more complicated to pull off, but selling your old vehicle to one dealership and buying your new car from a different one may make sense if the final invoice numbers work out in your favor. Use the Kelley Blue Book Instant Cash Offer tool to shop your trade-in vehicle at nearby dealerships. When you let the deals come to you, selecting the best trade-in offer for your situation is easier. Remember, you can always negotiate the offer, and pitting one offer against another is not unheard of when shopping for a vehicle. 

The Higher Costs of Car Insurance

Tariffs on imported cars and car parts have pushed insurance rates higher, even as car owners are already stretched to the limit by insurance costs. However, this sharp upturn appears to have stabilized somewhat. According to the Bureau of Labor Statistics, car insurance costs were 0.2% higher in April than a year earlier. By comparison, in September of last year, these rates were 3.1% higher year over year. Bankrate says the average cost of car insurance is $2,697 per year for full coverage. Full coverage, called comprehensive car insurance, covers natural disasters like wildfires, hurricanes, floods, and accidents. Before you seal the deal and sign anything for a new vehicle, compare car insurance quotes. 

What to Expect: Looking Ahead

New-car inventory in April was down 1.1% month over month but up 8.2% year over year. April numbers showed the number of available new vehicles in the U.S. hitting 2.86 million units, or 78 days’ supply. This is a notable decline from January and February’s numbers in the 90s, but year over year, we see an increase of 15.5%. This shift is mostly explained by tariff concerns last spring, which fueled accelerated sales. Automakers still contend with tariffs and conflict across the Middle East, suggesting a continuing need to balance steady inventory management with smart pricing. 

For buyers, the situation has not shifted significantly one way or another. Options in lower pricing bands remain limited, though careful shoppers can still locate incentives that can help lighten the financial burden. We will continue to monitor the war’s impact into the summer and the effect of skyrocketing fuel costs on the market.

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What to Do if You Need a Car Now

Incentives are a buyer’s best friend in this current market. If you can adjust your expectations about the type of car or brand you are willing to buy, there may be some good deals available. Beyond that, prices remain on a steady, modest increase. Before buying: 

• Research your options and expand your boundaries if needed.
• Look for deals and incentives, especially on inventory that dealers may be trying to offload to clear room for newer incoming models.
• Shop ahead for a car loan if you’re not paying cash.

RELATED: Paying Cash for a Car: Consider the Pros and Cons

Editor’s Note: This article has been updated since its initial publication.