Why Car Prices Are Falling Despite Trump Tariffs

The American automotive market is finally finding its footing after a period of significant disruption. New data reveals a pivotal shift, with vehicle inventories returning to a stable, pre-tariff normalcy while offering a glimmer of hope for buyers wary of high prices. The latest analysis of the new vehicle inventory landscape shows a market that is better supplied yet still grappling with the financial aftershocks of recent trade policies, creating a complex but more buyer-friendly environment.

A Return to Pre-Tariff Inventory Levels

According to the latest data from industry analyst Cox Automotive, the total new vehicle inventory in the United States reached 2.68 million units as of July 31, 2025. This figure represents a supply of 73 days, a key metric that indicates a market returning to equilibrium. This level is now comparable to periods before the implementation of significant tariffs, marking a crucial recovery for the automotive sector. The current inventory represents a decrease from the 2.83 million vehicles available at the start of July and is also 4.7 percent lower than the inventory recorded in the same period last year, suggesting a careful balancing act between supply and strengthening consumer demand. This rebalancing coincides with a healthy surge in sales, with over 1.1 million new vehicles sold in July alone.

Significant Disparities Exist Among Automakers

While the industry-wide average presents a picture of stability, a deep dive into the data reveals stark contrasts between different car manufacturers. The overall days’ supply is the fourth lowest it has been in the past year, but two dozen brands are sitting on inventories that far exceed the 73-day average. Leading this group is Land Rover, which ended July with a substantial 130 days’ worth of vehicles. It is followed by Ram with 121 days of supply, Lincoln with 117, and Audi with 114 days. Other brands with notably high inventory levels include Mitsubishi, Jeep, and Genesis, each holding over three months’ worth of supply. This indicates that while the market overall is normalizing, specific brands face greater challenges in aligning their production and import strategies with actual consumer demand.

A Slight Reprieve for Buyer Wallets

Perhaps the most welcome news for consumers is the movement in pricing. The average new vehicle listing price in July was recorded at $48,480. This marks a slight but notable decrease of 0.3 percent from the previous month, potentially signaling a cooling-off period. However, the broader financial picture remains complex. Compared to July of the previous year, the average listing price is still 2.8 percent higher. This year-over-year increase underscores the lingering financial impact of recent tariffs on the automotive industry. It demonstrates that while most manufacturers have absorbed significant losses, the cumulative effect of those policies has still been passed on to consumers in the form of generally higher prices than were seen a year ago.

The American car market is navigating a new normal, defined by adequate supply but elevated costs. While finding a specific model is easier than it has been in years, the financial legacy of recent economic policy continues to shape the final price tag. For savvy shoppers, this environment demands research, patience, and a readiness to negotiate, especially with brands boasting higher inventory levels.

Must Know

What is the current US new vehicle inventory?
As of the end of July 2025, the total new vehicle inventory in the US was 2.68 million vehicles. This represents a 73-day supply, which is considered a balanced and healthy level for the automotive market.

Which car brand has the highest inventory right now?
Land Rover currently has the highest days’ supply of any automaker, with enough inventory to last 130 days based on current sales rates. Ram, Lincoln, and Audi also have significantly higher-than-average inventory levels.

Are new car prices going down?
There are signs of slight price softening. The average new vehicle listing price decreased by 0.3 percent from June to July 2025. However, prices remain 2.8 percent higher than they were in July 2024, indicating that costs are still elevated compared to last year.

What does ‘days’ supply’ mean?
Days’ supply is a key industry metric that estimates how long the current inventory of vehicles would last if sales continued at their present rate without any new production or deliveries. A 60-70 day supply is often considered ideal.