Elevated New Car Prices Shift Market to Luxury Buyers in 2025 | Market Analysis – News and Statistics – IndexBox
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Americans are increasingly getting priced out of the new car market as prices remain elevated. According to data from Edmunds published in June 2025, the average transaction price for a new car in April 2025 was $48,422, slightly higher than average for the previous 12 months. However, there is a significant price disparity when compared with used cars.
The average transaction price for new cars was more than 29% higher and 35% higher compared to 3-year-old used cars in April 2025 than in April 2020, according to Edmunds sales data.
Dealers appeared to be offering some discounts to try and get new cars off the lots. The Manufacturers Suggested Retail Price, typically referred to in the industry as MSRP, averaged around $50,408 during April 2025. “The difference between the average transaction price and the suggested retail price proves that there was some discounting going on,” according to Ivan Drury, Edmunds Director of Insights.
Automotive expert and analyst Brian Moody told FOX Business that the higher new car prices are undoubtedly driving buyers to used cars or even forcing them to stick with their current car.
That shift is also reflected in who is still buying new cars. Nearly 19.2% of new-car buyers are now choosing luxury brands, according to iSeeCars – up sharply from roughly 11% to 12% before the pandemic, based on Cox Automotive data.
“One reason new cars are becoming more expensive is due to government compliance, fuel economy, safety equipment and smart technologies, all of which are adding to the complexity and cost of building a new car,” Moody said. Tariffs, according to Moody, are also raising prices on some models that source parts from overseas or build their cars entirely overseas.
However, Moody believes “theres a technology plateau happening with new cars,” which could lessen the incentive to buy new over a slightly used car. “Once you get self-driving like Super Cruise and Blue Cruise and every car has Apple CarPlay and back-up cameras and forward collision detection and lane departure prevention – then what? A 4-year-old minivan is likely to have the same tech as a brand-new car,” he said.
Source: IndexBox Market Intelligence Platform
This report provides a comprehensive view of the passenger car industry in the United States, tracking demand, supply, and trade flows across the national value chain. It explains how demand across key channels and end-use segments shapes consumption patterns, while also mapping the role of input availability, production efficiency, and regulatory standards on supply.
Beyond headline metrics, the study benchmarks prices, margins, and trade routes so you can see where value is created and how it moves between domestic suppliers and international partners. The analysis is designed to support strategic planning, market entry, portfolio prioritization, and risk management in the passenger car landscape in the United States.
The report combines market sizing with trade intelligence and price analytics for the United States. It covers both historical performance and the forward outlook to 2035, allowing you to compare cycles, structural shifts, and policy impacts.
This report provides a consistent view of market size, trade balance, prices, and per-capita indicators for the United States. The profile highlights demand structure and trade position, enabling benchmarking against regional and global peers.
The analysis is built on a multi-source framework that combines official statistics, trade records, company disclosures, and expert validation. Data are standardized, reconciled, and cross-checked to ensure consistency across time series.
All data are normalized to a common product definition and mapped to a consistent set of codes. This ensures that comparisons across time are aligned and actionable.
The forecast horizon extends to 2035 and is based on a structured model that links passenger car demand and supply to macroeconomic indicators, trade patterns, and sector-specific drivers. The model captures both cyclical and structural factors and reflects known policy and technology shifts in the United States.
Each projection is built from national historical patterns and the broader regional context, allowing the report to show where growth is concentrated and where risks are elevated.
Prices are analyzed in detail, including export and import unit values, regional spreads, and changes in trade costs. The report highlights how seasonality, freight rates, exchange rates, and supply disruptions influence pricing and margins.
Key producers, exporters, and distributors are profiled with a focus on their operational scale, geographic footprint, product mix, and market positioning. This helps identify competitive pressure points, partnership opportunities, and routes to differentiation.
This report is designed for manufacturers, distributors, importers, wholesalers, investors, and advisors who need a clear, data-driven picture of passenger car dynamics in the United States.
The market size aggregates consumption and trade data, presented in both value and volume terms.
The projections combine historical trends with macroeconomic indicators, trade dynamics, and sector-specific drivers.
Yes, it includes export and import unit values, regional spreads, and a pricing outlook to 2035.
The report benchmarks market size, trade balance, prices, and per-capita indicators for the United States.
Yes, it highlights demand hotspots, trade routes, pricing trends, and competitive context.
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