Car prices in the U.S. and Canada hit record highs by late 2025 due to supply shortages, tariffs, and inflation, with new cars averaging $63,264 and used cars $36,911.

Car prices in the U.S. and Canada have surged since the pandemic, with new vehicles averaging $63,264 by late 2025—30% higher than in 2018—and used cars reaching $36,911. Supply chain disruptions, including a global semiconductor shortage, limited production, while pent-up demand and inflation drove prices up. U.S. tariffs on steel, aluminum, and other goods, particularly those not meeting CUSMA rules, increased costs and forced supply chain changes. Though new car sales rose over 20% in November 2025 due to improved supply, prices remain high due to lasting inflation, higher input costs, and consumer financial strain, especially in the used car market.