Strong vehicle demand, flat pricing and a sprint for purchasing electric vehicles ahead of the end of federal incentives define the latest CarGurus Intelligence Report.
U.S. auto dealers may have expected rising tariffs to put upward pressure on vehicle prices this summer. Instead, the recent CarGurus Intelligence Report shows that both new and used prices held steady while demand soared.
“Even with rising import costs and economic uncertainty, the market is showing surprising strength,” Kevin Roberts, director of economic and market intelligence at CarGurus, says in a news release. “Prices for both new and used vehicles held steady in August, while demand hit multi-year highs. For dealers, it’s a favorable moment to capture this healthy activity, with vehicles spending less time on the lot and shoppers motivated to secure deals before the fall.”
New-Vehicle Prices Stay Flat Despite Tariffs
The report shows the average new-vehicle list price in August was $49,500, down 0.1% from July and 1% from August 2024. Despite tariffs increasing costs for several automakers, pricing trends have remained stable so far.
The mix of 2026 models is growing, with the latest model year now accounting for nearly one-quarter of new listings. As these newer vehicles reach dealer lots, CarGurus analysts suggest the average new-vehicle price could begin to rise closer to the end of the year.
Used Vehicle and EV Demand Rise Significantly
On the used side, sales rose 5.6% month-over-month according to the CarGurus Used Vehicle Demand Index. Inventory levels remain healthy, up 7.8% year-over-year, but down slightly from July. Market days’ supply fell to a three-year low, underscoring the strength of buyer demand.
Dealers are seeing vehicles sell more quickly as motivated buyers lock in deals ahead of potential price increases later in the year.
August marked a peak for retail EV sales in 2025, with new EV sales jumping 19.5% over July and 61% since January. Used EVs priced under the $25,000 federal tax credit eligibility threshold gained share in August even as listings declined, signaling accelerated buying activity.
Top-selling EVs included the Chevrolet Equinox EV at 12.1% of total new EV sales, followed by the Honda Prologue at 9.9%, the Hyundai Ioniq 5 at 8.7%, and the Ford F-150 Lightning at 4%. On the used side, Tesla models dominated, accounting for nearly half of all sales, with the Model 3 alone representing one-third of transactions. The Chevrolet Bolt EV and Nissan Leaf rounded out the most popular sub-$25,000 options.
Tariffs Impact OEMs Differently
Price shifts post-tariff implementation varied by manufacturer. Mitsubishi saw the largest average price increase at $3,167, followed by Jaguar Land Rover at $2,858, Hyundai at $1,050, and Subaru at $1,026.
On the other hand, some brands posted lower prices despite tariffs. Nissan showed the largest price decrease at $3,041, followed by Volkswagen at $2,616 and Mazda at $1,834.
Fed Rate Cut Could Boost Auto Market
The Federal Open Market Committee is widely expected to announce an interest rate cut this week, a move that could directly impact auto financing conditions in the months ahead.
“All signs point to the Federal Open Market Committee (FOMC) announcing a reduction in its target interest rate during this week’s policy meeting,” says Satyan Merchant, senior vice president, automotive and mortgage business leader at TransUnion. “While a 25-basis-point cut is currently viewed as the most probable outcome, speculation continues around the possibility of a more aggressive 50-basis-point reduction. The key question now is not if a cut will happen, but how deep it will be.
“Lower interest rates typically improve financing conditions, making auto loans more accessible and potentially more affordable for a broader range of buyers,” Merchant says. “Lower rates could also help serve to stimulate the auto refinance market as borrowers seek to improve their monthly liquidity through lower monthly payments.”
Texas-based subprime auto lender and used-car retailer Tricolor Holidays filed for Chapter 7 bankruptcy last week and is liquidating, according to The Financial Times. The upset has led some to wonder if the failure could have a domino effect for auto finance lenders.
Merchant cautions that interest rates alone will not solve all the industry’s challenges. “Vehicle prices remain elevated, and the resulting monthly payments continue to pose affordability challenges for many consumers,” he says. “Additionally, the lingering impact of tariffs and supply chain disruptions continues to exert upward pressure on costs, further complicating the recovery of the auto sector.”
