Car shoppers expecting blowout Memorial Day deals in 2025 may have noticed something different this year: the discounts just aren’t what they used to be. From lackluster financing specials to higher-than-usual lease payments, automakers appear to be holding back. The reason? A sudden drop in new car inventory has automakers tightening the reins.

Here’s a look at the latest new car inventory numbers, and how automakers are responding to this temporary ‘buyer’s market’.

New Car Inventory Is Much Lower In May 2025

From April to May 2025, new-vehicle inventory in the U.S. fell from 3.08 million to 2.8 million vehicles — a 10% decline. The latest numbers are courtesy of inventory management firm Lotlinx, which shared their market update with Automotive News. That’s the steepest drop we’ve seen since early 2023, and it’s no coincidence.

As buyers rushed to beat potential tariff-related price hikes, dealer lots thinned out fast. With fewer cars available, many automakers have pulled back on Memorial Day incentives, especially for popular models.

The latest inventory tally found that the estimated days’ supply of new cars shrank to 58 days, down from 71 days a month prior.

Compare that to a year ago, when inventory stood at 2.86 million with a 75-day supply — and you can see why 2025 isn’t delivering the same sales splash. Although inventory levels are similar to May of 2024, cars are selling much faster right now. 

Ford and Toyota Pull Back the Most

Among the seven automakers that report monthly inventory and sales data, Ford and Toyota saw the sharpest declines in supply. Toyota continues to operate with the tightest inventory in the U.S., holding less than 30 days’ supply.

Ford’s situation is more complex. Despite facing an inventory crunch, Ford also raised prices on several popular models, including the Maverick, Bronco Sport, and Mustang Mach-E, all of which are produced in Mexico and now subject to increased tariffs. Instead of making Memorial Day a big sales moment, Ford is charging more. You can read our full breakdown of Ford’s underwhelming Memorial Day sales and price hikes here.

Which Vehicles Are Toughest to Negotiate?

Lotlinx data shows hybrids are in the shortest supply at just 48 days nationwide. Traditional gas-powered vehicles follow at 59 days, with electric vehicles sitting at 90 days of supply — a month-over-month increase for the EV segment.

Here’s a quick snapshot of May inventory by new car segment:

• Sedans: 50 days’ supply
  
• SUVs: 56 days
  
• Pickups: 69 days
  
• Crossovers: 74 days
  

Even the highest-supply category — crossovers — saw declines from April levels.

Fewer Deals, But Not No Deals

Although overall Memorial Day incentives are milder in 2025, there are still some solid offers out there — especially if you’re flexible on model, trim, or location. We rounded up the Best Memorial Day Car Deals of 2025, including great lease specials, 0% financing, and up to $10,000 in cash offers. The deals are out there this May, if you know where to look.

But if you’re shopping for a high-demand model like the Honda CR-V, Toyota RAV4, or any hybrid under $35K, expect dealers to play hardball. With dwindling inventory, there’s just no reason to discount deeply — and they know it.