Morris Smith III, a Ford dealer based in Kansas, describes the latest trend in car pricing as “stealth” — a subtle but effective way for automakers and dealers to increase what consumers pay without officially raising the Manufacturer’s Suggested Retail Price (MSRP). While the sticker price might remain the same on the window of a new car, the overall cost buyers face is rising due to a mix of hidden adjustments and changing sales tactics.
For those deeply familiar with the automotive industry, these pricing moves are not new. But for everyday car buyers, it can be confusing and frustrating. The MSRP is only the starting point in the pricing journey. Beyond that number lies a complex landscape of incentives, fees, and dealer add-ons that all affect the final sale price.
How Automakers and Dealers Increase Costs Without Raising MSRP
Smith explains to Bloomberg that from the manufacturer’s perspective, official prices have not increased. Yet, buyers are experiencing several thousand dollars in actual price hikes. This discrepancy comes from various behind-the-scenes adjustments, including:
Reduced Incentives and Rebates: Automakers traditionally offer cash-back deals or rebates to encourage sales. By cutting back on these incentives, the effective discount buyers receive shrinks, raising the final price they pay.
Increased Delivery and Destination Fees: These mandatory fees, which cover the cost of transporting vehicles from factory to dealer, have been quietly creeping up.
Dealer Lot Price Adjustments: Dealers may also add “market adjustments” or markups on vehicles, especially in high-demand models, to offset rising costs and increased tariffs.
Less Attractive Financing Offers: Zero-percent or low-interest financing deals, which help reduce the total cost of ownership, have become less common and less generous.
Together, these factors mean that while the MSRP remains stable on paper, consumers end up paying significantly more out-of-pocket.
The Numbers Paint a Clear Picture
Kelley Blue Book reports that the average transaction price for new vehicles increased by 2.5% in April alone — the largest single-month jump in five years. At the same time, the average incentive rate dropped from about 10% to just 6.7%. Additionally, zero-percent financing deals are now at their lowest levels since 2019. This combination of less discounting and higher base prices effectively raises costs for buyers immediately.
Tariffs and Inflation Are Driving Up Prices
Underlying these pricing tactics are real cost pressures. Tariffs introduced during the recent trade disputes have made components and imported vehicles more expensive. Automakers simply have no choice but to pass these costs on to customers, either through official price increases or the “stealth” methods described.
Sean Tucker, editor at Kelley Blue Book, explains that while there isn’t a single sharp jump in prices, consumers will see the most dramatic increases once existing inventories of pre-tariff cars are sold out. At that point, dealers will be forced to adjust prices upward to cover the increased replacement costs.
Automakers Are Already Planning Price Increases
Several manufacturers have publicly committed to raising prices for the 2026 model year. According to AutoNews:
Mercedes-Benz is expected to increase prices by 3% to 5%.
BMW plans an average increase of 1.9%.
Volvo will raise prices by around 4%.
Subaru has already implemented a 4.2% price increase since last November.
This suggests that the current “stability” in sticker prices is only temporary, and buyers should expect higher MSRPs in the near future.
What This Means for Car Buyers
The takeaway is that while automakers may claim prices haven’t risen, the real-world cost of buying a new car is going up significantly. Buyers are paying more in less obvious ways — through fewer discounts, higher fees, and less favorable financing — even if the MSRP numbers don’t reflect those increases.
As the market adjusts to tariffs, inflation, and supply chain challenges, consumers will need to be savvy shoppers, comparing total costs rather than focusing solely on sticker prices. Transparency in pricing and awareness of these hidden factors will be key to making informed decisions in today’s car-buying environment.
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