New Car Prices Won’t Drop in 2026, GM and Toyota Warn Buyers

GM and Toyota just finished a decent 2025 in the United States, but both are signaling the same thing: do not expect a repeat in 2026. After three years of recovery, the combination of record prices, higher ownership costs, and fading one-off supports has them bracing for a tougher market, according to the Wall Street Journal.

Strong 2025 Headlines, Weak Q4 Underneath

U.S. light-vehicle sales for 2025 landed around 16.3 million, roughly 2% higher than 2024. On paper that looks healthy, and full-year numbers for both automakers were solid. GM stayed America’s volume leader with roughly 2.9 million sales and mid single-digit growth. Toyota’s U.S. tally climbed around 8%, driven by demand for relatively attainable models and hybrids.

The problem is how the year ended. GM’s Q4 sales fell about 7% as consumers pulled back. Toyota still posted an 8% Q4 gain, but only by absorbing a big chunk of tariff and cost increases instead of passing them straight to customers. Toyota has already warned that approach is not sustainable; prices will have to move up for it and its rivals.

The pressure shows up on the consumer side too, as the average new-car payment has climbed into the high-$700 range, while insurance, maintenance, and financing all cost more. That makes buyers far more sensitive to price bands and trims, which is why Toyota is leaning so heavily on its big Kentucky plant that builds high-volume hybrid sedans and crossovers like Camry and RAV4.

Both companies are now betting that efficient, mid-priced products will do more for 2026 volumes than flashy halo EVs. GM, meanwhile, is quietly tilting back toward internal combustion where the demand is strongest. The company is also proud that nearly a quarter of its 2025 sales came from models starting under $30,000, but that also highlights how hard it has to work to keep cheaper vehicles in the mix.

What Their Warnings Really Mean For Shoppers

When GM and Toyota both say next year will be harder, they are really talking about affordability. They expect U.S. volumes to slip from 2025’s 16.3 million level as higher prices and less generous incentives bite. Interest-rate cuts or tax tweaks might soften the blow, but neither automaker is planning around a big rebound.

For us, that translates into a market where discounts may creep up in spots, but MSRPs and total ownership costs are unlikely to slide back to pre-pandemic levels. The cars most likely to keep moving will look a lot like the ones rolling out of Toyota’s hybrid-heavy plants and GM’s refreshed gas-car lines, these will be efficient, mid-size, and priced carefully.