Modest discounts won’t offset rising costs
As 2025 car models roll out and dealers prepare to make room for 2026 inventory, shoppers may be hoping for bargains. But industry experts warn that while modest discounts or favourable financing may be available, the effect of new tariffs and supply pressures will likely outweigh any savings.
Brian Moody, executive editor at Autotrader, told FOX Business that consumers can expect only small discounts or low interest rates—and only for those with strong credit. “Except on a few models, big discounts will be increasingly hard to find,” he said.
In fact, average transaction prices (ATPs) in August climbed 2.6% compared to a year earlier. That’s the sharpest annual increase since April 2023, according to Moody.
Electric vehicles may be the exception
One potential bright spot is the electric vehicle (EV) market. Moody noted that buyers might find better deals on EVs as automakers push to sell them before a major tax credit expires on September 30.
Right now, qualifying buyers can use a federal tax credit to lower the upfront cost of new EVs. After the deadline, however, new purchases will no longer qualify for that credit, likely making electric models more expensive.
“Many dealers and automakers will do what they can to move those cars while consumers are still interested,” Moody said.
For shoppers hunting for deeper bargains, used EVs may be an even smarter buy. Federal incentives currently offer up to $4,000 off qualifying used EVs and plug-in hybrids, as long as the car is at least two years old, costs $25,000 or less, meets weight and battery rules, and is purchased from a licensed U.S. dealer.
That means a 2024 Nissan Leaf listed at $17,000 could end up costing $13,000 after the tax credit—a substantial discount for a nearly new car.
Tariffs add new pressure on prices
Jessica Caldwell, head of insights at Edmunds, also pointed to tariffs as a key reason why car prices are set to rise further. While the increases may not be as severe as originally feared, they are still expected to push prices upward.
“Automakers seem to be taking a measured approach: they recognise that consumers are already financially stretched and don’t want to risk losing sales or market share,” Caldwell explained.
Discounts aren’t completely off the table, she added. However, shoppers should not expect broad incentives. Instead, automakers are likely to adjust prices on a case-by-case basis depending on supply and demand for specific models.
Tighter inventory means fewer deals
David Greene, principal industry analyst at Cars.com, said inventory is also playing a major role. Available stock is already down more than 6% compared to last year, and vehicles are moving off dealer lots faster.
With fewer cars sitting around, dealers feel less pressure to offer steep discounts. Instead, they can focus on moving vehicles at higher prices, especially as supply tightens further.
“The best deals right now are on outgoing 2025 models that are already in stock,” Greene said. “Once those are gone, shoppers should expect to pay more as tariffs and limited supply push prices higher.”
What buyers can do now
For consumers hoping to save money, timing will be key. Experts recommend acting sooner rather than later if you’re in the market for a new or used car. With tariffs, shrinking inventory, and higher transaction prices, waiting too long could mean paying more.
At the same time, those open to buying electric vehicles—particularly used ones—could find some of the best bargains available before federal tax credits expire.
In short, while modest discounts may still exist, the broader trend points to rising car costs across the board. Shoppers with flexibility and good credit may be able to take advantage of today’s deals, but the window is quickly closing.
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