Tariff Fears Fueled Spring Car Sales, but June Decline Signals Demand Is Slipping

After a robust spring sales season driven by fears of rising auto prices due to President Donald Trump’s proposed tariffs, the US auto market is now losing steam. Automakers like General Motors, Ford, and Toyota reported strong second-quarter gains—GM up 7.3%, Ford 14%, and Toyota 7.2%—largely attributed to customers rushing to purchase before price hikes took effect. But by June, the pace had noticeably slowed, signaling that the initial surge was more of a temporary spike than a sustainable trend.

Spring Sales Surge Fades as Economic Uncertainty Slows Consumer Demand and Confidence

Industry executives acknowledge that much of the springtime momentum stemmed from “pull-forward” purchases as buyers tried to outpace potential tariff-induced price increases. Toyota’s US sales head, David Christ, noted that the market returned to a more normal pace after May.

Analysts estimate that the spring surge boosted second-quarter auto sales by around 2.5% year-over-year. However, this created a vacuum in demand by June, with automakers like Subaru and Kia seeing sharp declines, and others like Nissan posting a 6.5% drop in quarterly sales.

Underlying the sales slowdown is growing consumer hesitation, with concerns about the economy overtaking high interest rates as the biggest drag on auto purchases. Analysts estimate the annualized selling rate dropped to 15 million in June, the lowest in a year and down sharply from April’s 17.6 million. Cox Automotive’s Jonathan Smoke stated bluntly, “The party is over,” forecasting a sluggish second half of the year as high prices and economic uncertainty keep buyers on the sidelines.

Rising Auto Costs Strain Budgets as Tariffs Threaten to Worsen Affordability Crisis

Soaring prices are forcing more consumers to stretch their finances. The average new car price in June hit nearly $49,000—up 28% from 2019—while a record number of buyers are committing to $1,000-plus monthly payments. Dealers report that the average monthly payment rose to $747, and the share of 84-month loans has increased significantly.

Automakers have so far avoided across-the-board price hikes, but with tariffs looming, selective price increases and reduced incentives are becoming more common, setting the stage for broader price escalations.

The June decline is widely seen as a hangover from spring’s pre-tariff buying spree, with more challenges expected in the months ahead. Automakers like Hyundai are counting on new model releases in the second half of the year to sustain some momentum, though industry leaders acknowledge that conditions remain difficult.

Dealers, economists, and manufacturers agree: unless there’s a meaningful change in consumer confidence or a break in rising costs, affordability and flexibility will be essential for weathering what lies ahead. Tariff-related price increases—projected to add up to $2,000 per vehicle—are likely to further dampen demand before the year ends.