Prices are expected to keep rising unless the US administration reverses course on import tariffs
- Cloud Theory is a company that has been tracking pricing data on all of the US since 2018.
- Automakers and dealers started pulling incentives and discounts in February, fearing Trump’s tariffs.
- Once implemented, advertised prices rose and are likely to keep rising unless something changes
On December 7, 2024, the average advertised price of new cars was $50,030. Since that date, it had dropped below $50k, which obviously was good news for buyers. However, on April 14, new vehicles’ average marketed price once again crossed that barrier, albeit slightly, and at that date stood at $50,025. What’s worse, that number is expected to rise due to Trump’s tariffs.
What Exactly Is Advertised Marketed Price?
ATP, or Average Transaction Price, represents what the consumer actually pays. In contrast, the average marketed (or advertised) price is the price a dealer lists for a vehicle, which may include incentives and discounts. As a result, it doesn’t always reflect the actual amount a buyer will pay. The true price can only be determined by tracking daily transactions, which is what Cloud Theory does.
More: Detroit Is Begging Trump To Stop As His Import Tariffs Threaten Thousands Of Auto Jobs
Cloud Theory has been tracking average marketed prices by VIN at franchised dealerships nationwide on a daily basis, partly to find out what impact Trump’s administration actions, like the import tariffs introduced on April 2, will have on the automotive market.
Vice president of data science and analytics Rick Wainschel told Auto News that the recent price increases have been due to manufacturers and dealers axing many discounts and incentives as early as mid-February, when President Trump announced his intention to impose stiff tariffs on imports.
“Every industry, including automotive, doesn’t know how to plan for this,” Wainschel said, adding that this move is mostly a precaution on their part as everyone fears what might happen next: “There are pullbacks occurring with future uncertainty in mind.”
Things Were Bad In The Pandemic; They Could Get Worse Now
Cloud Theory has been tracking pricing data since 2018, so it has a massive archive. In March 2021, for instance, during the COVID pandemic, it recorded a big rise in advertised prices as automakers struggled to cope with historic inventory lows due to the microchip shortage and shifting their production mix in favor of the most profitable vehicles. Six months later, in September 2021, advertised prices crossed the $40,000 mark for the first time, and on July 7, 2023, reached $51,824.
More: Stellantis Hit With A Downgrade As Tariffs Pose Huge Problem
In the past 12 months, the highest average marketed price stood at $50,590 on June 6, 2024, and then gradually decreased as inventories grew and remained steady at nearly 3 million vehicles. By February 2024, the average marketed price had fallen to $48,544. It started rising again when the Trump administration announced that it intended to implement new tariffs. Since April 1, one day before they were slated to come into effect, average advertised prices increased even more – and have continued doing so until now.
Numbers may not always tell the whole truth, but in the case of Cloud Theory’s data, they paint a very clear picture: unless the administration reverses course, prices will rise as automakers aren’t willing to take the hit all by themselves, so buyers will have to pay more. It’s as simple as that.
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