Car Prices Didn’t Rise As Much As Expected Last Year. Trump Is Claiming Victory.

The White House is eagerly highlighting the auto industry this winter as evidence that its trade policies haven’t made goods more expensive.

But industry analysts and even some Republicans are cautioning that auto prices — now at an all-time high — aren’t likely to be a political panacea in the pivotal 2026 cost-of living debate.

“Americans understand they were promised that prices were going to go down, and costs are just kind of hovering versus going down,” said Tres Watson, a Republican strategist in Kentucky, which is the home to several auto manufacturing plants. “Whereas without tariffs, I think we'd see a marked decrease in prices.”

The Trump administration, however, is focusing on the fact that car prices did not soar by thousands of dollars, as some market analysts had predicted after the president hiked tariffs on imported autos and auto parts last spring. They also note domestic car sales remained strong, growing by more than 2 percent in 2025.

Earlier this month, the White House distributed a press release declaring “Trump Policies Power U.S. Auto Sales,” and President Donald Trump appeared in Detroit to tout his trade agenda. Three Cabinet secretaries also went on a “Freedom Means Affordable Cars Tour” in the Rust Belt over the Martin Luther King Jr. holiday weekend.

However, the price of a new car still ticked up slightly over the course of 2025, hitting a record high of around $50,326 in December, according to Kelley Blue Book, a company that provides price valuations and other data on cars. And prices on new vehicles are already rising in 2026, as analysts predict a down year in sales.

Those stubbornly high prices, which have remained elevated since Covid-19 triggered supply chain snarls in 2020, underscore a key messaging challenge for Trump and Republicans on affordability ahead of the 2026 midterm elections: It’s hard to sell voters on the idea that “it could have been worse.”

“I am always concerned about the price of the car,” said Rep. Mike Kelly (R-Pa.), who owns several auto dealerships in western Pennsylvania. “The American people, they love to have their own cars. But it’s getting more difficult to do it.”

Trump has been dismissive of concerns about high prices, frequently arguing that the issue of affordability is a “hoax,” and blaming Democrats for high prices. At the same time, the administration is highlighting policies it says will help car buyers reduce their costs.

“The Trump administration is helping Americans in the market for another car climb out of Joe Biden’s affordability crisis with a new tax deduction for Made-in-USA cars and lower interest rates,” said Kush Desai, a White House spokesperson. “At the same time, the Trump administration is rectifying broken policies that have been driving car prices in America through the roof for years by slashing costly CAFE standards and other regulations that are reducing consumer choice and raising costs.”

Trump highlighted his auto tariffs at a White House press briefing focused on celebrating his first year in office, arguing that they have helped spur auto companies to build more in the U.S. Stellantis, which makes Jeep and Dodge, pledged to invest $13 billion in U.S. factories over the next four years and Toyota, the Japanese automaker, has pledged $10 billion over the next five years.

“If we didn’t have tariffs, you wouldn’t have any car dealers,” Trump said. “We have now more car factories being built in the U.S. than ever before because of tariffs. If they take those tariffs away, China will eat our lunch.”

But the higher duties are also adding billions in costs for even domestic automakers, who rely on overseas parts and labor to build their cars as part of highly integrated global supply chains. Rather than raising prices for many models, most companies opted to “eat” the initial tariff costs in 2025, which took a bite out of their bottom lines.

Ford Motor Co. estimated in its third-quarter earnings report that the tariffs cost the automaker $1 billion in 2025 and General Motors reported in October that duties would cost the company between $3.5 billion to $4.5 billion. Both those estimates were lower than the companies had previously predicted, after the Trump administration announced a credit for some tariffs for domestic car companies.

“The automotive industry remains a very competitive industry, and most automakers were looking left and right at their competitive sets and saying, ‘Okay, well, who's going to blink first,’ if you will. And no one blinked, really,” said Erin Keating, an executive analyst at Cox Automotive.

And Keating noted that while sales were up last year, that could be partially explained by a rush of people buying cars after the tariffs were first announced.

The industry is projecting that more of the cost will be passed onto consumers this year, and Cox Automotive expects new vehicle sales to contract in 2026.

“The feeling, with new models, is that we will start to see [price increases],” said Glenn Stevens Jr., the executive director of MichAuto, an arm of the Detroit Chamber of Commerce. “But again, you can't push that too far because of the affordability issue and your potential to lose market share. So we see a real balancing act.”

The push to reshore auto production in the U.S., meanwhile, would take years to come to fruition — meaning companies will still have to stomach a higher cost for goods for the foreseeable future.

“Voters know how much things cost,” said Eric Hyers, a Democratic strategist who has worked on gubernatorial and Congressional campaigns throughout the Midwest. “And no amount of telling them that the price of something is coming down, when it clearly is not, it's not going to convince them of what you're saying, if what you're saying is fundamentally false.”

Trump threw global auto supply chains into flux last year when he announced a 25 percent tariff on automobiles and auto parts that went into effect in April and May, respectively.

He then inked deals over the summer with the European Union, Japan and South Korea to lower their auto tariffs to 15 percent. While that eased the pricing pressures, somewhat, it also drew complaints from U.S. automakers that the administration had made it cheaper to import finished cars from abroad than to build autos at home using North American parts.

The White House later responded by issuing its plan to provide tariff rebates for car companies, based on how much of the vehicle contains U.S. parts.

“I think that there’s been an open dialogue between the White House and the auto industry and they’ve worked through many of those issues,” Sen. Jon Husted (R-Oh.) said in an interview, predicting that “a lot of that uncertainty is … in the rearview mirror.”

The administration and Republican lawmakers are also looking to counter concerns about auto prices by highlighting a provision in last year’s “Big Beautiful” tax package that eliminated taxes on car loans, as well as a rollback of Biden-era fuel economy standards and a $7,500 consumer tax credit for electric vehicles.

“Obviously, prices are going to come down as a result of not being forced to have to produce electric cars that people don’t want,” Rep. Sam Graves (R-Mo.) said in a recent interview.

Watson, the GOP strategist, is skeptical: "I think the voters appreciate the help, but at the same time, I think a lot of them look at it and say, well, [high prices] could have been avoided in the first place, if you hadn't done this, that or the other.”

Chris Marquette contributed to this report.