New-vehicle prices remained stable in May as automakers and dealers worked to offset rising costs tied to tariff uncertainty, according to new data from Cox Automotive’s Kelley Blue Book.
The average transaction price (ATP) for a new vehicle in May was $48,799, nearly unchanged from April’s revised figure of $48,811. Compared to one year ago, ATPs were up 1%. The industry also saw a modest increase in incentives, rising from 6.7% of ATP in April to 6.8% in May, with an average of $3,297.
While prices held steady, the overall sales pace slowed notably. May’s seasonally adjusted annual rate dropped to 15.6 million, down from 17.3 million in April. Despite the cooling pace, manufacturers continued strategic pricing efforts. Some, including Volkswagen, Mazda, Land Rover, Volvo and BMW, cut incentive spending by more than 10%. On the other hand, Toyota, Tesla and Nissan significantly increased incentive activity. Toyota’s incentives rose from 3.4% to 4.1% of ATP but remained well below the industry average.
The average manufacturer’s suggested retail price (MSRP) climbed to $50,968 in May, the highest point so far in 2025 and up from $50,774 in April. Year-over-year, the MSRP increased by 2.1%, which is below the long-term average growth rate of 3.5%.
Segment-level pricing remained largely stable. The compact SUV segment, the nation’s best-selling category, had an average price of $36,515. Incentives ticked up slightly to 8.0% of ATP. Prices also rose for sports cars, luxury cars and subcompact luxury SUVs, while pickup truck prices increased 0.9% to $42,062. Incentives for trucks edged down from 6.0% to 5.9%.
Electric vehicles saw a sharper shift. The average EV ATP declined to $57,734 in May, down from $59,123 in April and 1.1% lower than a year ago. EV incentives surged to 14.2% of ATP, averaging $8,225 — the highest recorded since 2018. Tesla’s average transaction price dropped 1.5% to $55,277, with the Model Y leading the brand’s decline at 2.9%.
