Depending upon which set of numbers you examine, new vehicle sales are going to rise a bit in June or fall a bit in June. Ultimately, the impact of the Trump tariffs is being felt by automakers and the dealers that sell those vehicles. Go to Headlight.News where we try to make sense of what the experts are predicting.
New vehicle sales are expected to fall in June as the Trump tariffs take hold.
June new vehicle sales will be announced next week and after they fell last month, many predicted it was the beginning of the slide that the Trump administration’s tariffs would bring once they were in full effect.
June sales are expected to fall 6.3% compared to last June and more than 15% from last month, according to Cox Automotive. Second quarter sales, however, will rise 1.7% on a year over year basis, so there is some silver lining.
“The sales forecast is showing a cooler market in June, as consumers face tighter inventory levels and reluctance on the part of most dealers to add big discounts,” noted Charlie Chesbrough, senior economist at Cox Automotive.
“Much of the pull-ahead demand that fired up sales in April and May has now been satiated, so consumer demand is expected to be weaker in the coming months. Buyers are very price-sensitive right now. As more tariffed products replace existing inventory over the summer, prices are expected to trend higher, leading to slower sales in the coming months.”
Not so fast
Buyers are seeing prices rise on new vehicles in June due to the new tariffs.
“Not so fast” is the most apt description of new vehicle sales in June, but there is a slight upside. If you compare the numbers for the actual same number of days that vehicles can be sold, car sales should rise slightly in June.
Total new-vehicle sales for June 2025, including retail and non-retail transactions, are projected to reach 1,247,900, a 2.5% increase from June 2024, according to a joint forecast from J.D. Power and GlobalData. Further muddying the waters is their belief that new-vehicle total sales for the second quarter will reach 4,184,000 units, a 2.5% increase from Q2 2024.
Unfortunately, there are two fewer sales days this June than there were last June. When you get Power and friends to use the same metric, they predict June sales will fall slightly less than what Cox predicted at 5.4%.
“June sales are subdued, with the sales pace falling to its lowest level in the past 12 months,” said Thomas King, president of the data and analytics division at J.D. Power. “However, care needs to be taken when interpreting June results, as they are not fully indicative of the underlying demand for new vehicles.”
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Sales winners
The tariffs are bringing about change — and quickly. Far more automakers are going to see Q2 and half-year sales drops than not.
Trump’s auto tariffs formally went into effect on May 3.
“The big winner in the first half of 2025 has to be General Motors,” added Chesbrough. “Despite all the challenges, GM’s sales are expected to finish above 1.4 million units, up more than 12% from last year. Double-digit growth across all GM brands fueled the success. Hyundai, too, had a strong first half and is expected to improve further this year.”
One trend emerging in 2025 is the strength of the largest automakers. The five biggest by volume — General Motors, Toyota, Ford, Hyundai, Honda — are all expected to see notable market share growth this year, while smaller or more specialized brands or companies are losing share or, at best, treading water in this market.
Other factors
The decline isn’t necessarily all due to the tariffs, according J.D. Power’s King. He points to other factors that added fuel to the fire … or water to ashes, if you will.
“There are three critical factors to understand when evaluating June results. The first is that year-over-year comparisons are affected by a large dealer software outage event that limited many dealers’ ability to sell vehicles in June 2024. This event reduced retail sales by approximately 85,000 vehicles, meaning that year-over-year sales results appear considerably more favorable than they actually are.
By some estimates, U.S. car sales could drop 2 million this year due to tariffs.
“The second factor is payback from the tariff-related rush to showrooms in March and April of this year. In those months, approximately 173,000 extra vehicles were sold as buyers pulled purchases forward in anticipation of future tariff-driven price hikes. That pull-ahead effect has now become a payback effect, deflating June sales below the actual level of vehicle demand.
“The third factor is that while pre-tariff expectations were that discounts would rise during the course of 2025, they have actually fallen. Specifically, incentive spending expressed as a percentage of MSRP has declined from 6.1% in January 2025 to just 5% in June. This reflects the cost-pressure tariffs are creating for manufacturers, but it is also causing some shoppers looking for affordable vehicles to remain on the sidelines.
What you should know
Although sales are down, prices appear to be up — also a tariff issue. Power and Global Data noted the average retail transaction price in June should hit $46,233, good for a $1,400 jump. That’s up 3.1%, although only $77 compared to May.
The average manufacturer incentive per vehicle is on track to reach $2,727, an increase of $93 from May, and an increase of $39 from a year ago. However, expressed as a percentage of MSRP, incentive spending is currently at 5.4%, a decrease of 0.1 percentage point from a year ago.
Higher prices translate to higher monthly loan payments. Average monthly finance payments in June are on track to reach $747, an increase of $22 from June 2024, and the highest on record for the month of June.
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