Trump tariffs are here. Why these people are buying new cars now

USA Today

02-04-2025

Trump tariffs are here. Why these people are buying new cars now Donald Trump's auto tariffs go into effect Wednesday. Some buyers have rushed to finalize their car purchase before anticipated price increases, but is it the right move?
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Should you buy a car before auto tariffs go into effect?
President Donald Trump has announced a 25% tariff on imported cars and key auto parts. Here's what it means for consumers and automakers.
Jessica Valor had been casually car-hunting since September with the goal of upgrading from her 12-year-old Mini Cooper this summer. Then auto tariffs set to go into effect Wednesday sped up her timeline.
A project manager in the technology industry in Houston, Valor had her eye on a 2025 Toyota RAV4 Limited Hybrid in blueprint blue with a tan interior. The only hitch? It's made in Japan and would be subject to a heavy tariff. She negotiated a price below invoice and drove the car off the dealer's lot two weeks ago.
'The thought of it being out of reach come June or July made it a little easier to pull the trigger now,' Valor said.
She is not alone. The dealership told her it is seeing a noticeable increase in foot traffic as car buyers try to get ahead of the 25% increase on vehicles and parts produced outside the United States. President Donald Trump's tariffs are expected to significantly increase the prices of new vehicles.
Higher prices for new cars are also expected to raise used car prices, though it's unclear when consumers can expect price hikes with lots still lined with cars and trucks that were not subject to the tariffs.
'I think you're starting to see a little more panic and concern about the tariff,' said Art Wheaton, director of labor studies at Cornell University's School of Industrial and Labor Relations and a transportation industries specialist.
That concern drove Jennifer Garrett of Arlington, Texas, to rush her purchase of a new Hyundai Elantra.
Right before the COVID-19 pandemic, Garrett was in the market for a secondhand Elantra. 'I was lackadaisical. I was not sure what color I wanted. Then used cars shot up $2,000 overnight,' Garrett said, making a car too expensive on her income from disability.
For years, she relied on Uber and Lyft.
'I didn't want the same thing to happen again,' Garrett said. "But I still would have rather taken my time to find the right used car."
Tariffs top of mind for car buyers
Data from car-shopping app CoPilot found supply on dealership lots has dropped 'significantly' since March 23, especially among foreign-manufactured vehicles. CEO Pat Ryan said the data signals more shoppers rushing to buy before a price increase.
As of Sunday, supply for the Chevrolet Blazer, which is assembled in Mexico, fell 24%, according to CoPilot. The Volkswagen Taos, also assembled in Mexico, saw supply drop 20%.
"Consumers are facing the reality of President Trump's campaign promise of tariffs, and lately, it's been one of the first things on their mind when buying a car,' Ryan said in an emailed statement.
Justin Emerson, a salesperson at an Audi dealership outside of Phoenix, said he helped one tariff-concerned couple purchase a car the day after Trump announced the upcoming auto tariffs. Used cars in particular have been selling fast in recent weeks, he said.
While his store typically holds 28 to 35 used vehicles, 'I'm down to half that,' he told USA TODAY.
Other buyers anticipating steep tariffs made their purchases in recent weeks and months.
Nicole Foster, a healthcare administrator from Houston, was not in the market for a new car but said talk of looming tariffs changed her mind, especially with her car warranty up at the end of 2025.
She traded in her 2018 Volkswagen Tiguan for a 2024 model in December, before Trump was sworn in, to get ahead of any tariff-related price hikes for imported car parts.
'The day I saw it, I signed for it,' she said. 'Under normal circumstances, I wouldn't have done that.'
Chris Stagner, 48 of Los Angeles, said tariff talk and political action from Trump advisor and Tesla CEO Elon Musk prompted him to trade in his 2023 Model X in early March.
'I decided I no longer wanted to be associated with the brand,' he said.
Stagner said trading in a newer electric vehicle may not have been the wisest financial move, but he wanted to get ahead of any price increase. He now drives a GMC Sierra electric truck.
Riley Brown, who works in financial services in Jacksonville, Florida, had been paying close attention to Trump's rhetoric on tariffs. His 2013 Toyota Prius had nearly 170,000 miles on it, and he knew he either had to buy a car right away or hope his Prius didn't have any major issues for at least the next four years.
'I was extremely wary of the election, and Trump's economic policies absolutely had an impact on my decision to get a new car,' said Brown. 'I knew it was only a matter of time before basically everything got even more expensive.'
In search of a reliable ride, a few weeks ago he chose a peppy 2025 Hyundai Elantra Hybrid with a 10-year warranty and 2.99% financing on a five-year loan.
The tariffs on cars and auto parts announced March 26 'validated my decision,' he said.
Other buyers are deferring car purchases because of tariffs.
Tom Hewitt, a widower and retired insurance manager from Trenton, New Jersey, got that 'new car itch' in September. He kicked the tires on dozens of models before narrowing the field to a 2026 Honda Passport.
But with few deals offered at dealerships overrun by buyers trying to get ahead of the Trump tariffs, he ultimately decided to postpone the purchase.
He says he'd much rather put money into repairing the cars he has than pay sky-high sticker prices. 'Take care of your car and your car will take care of you' is his philosophy – an oft-repeated mantra of savvy car owners.
Staying on the sidelines won't shield car owners from rising prices. Imported auto parts will be affected by tariffs, experts say. Insurance premiums will also rise as repairs become more costly, they said.
'You're going to run into all of these (expenses) that are directly impacted by the cost of tariffs on vehicles new and used,' Wheaton said. 'Buckle your seat belts.'
Tariff impacts 'significant and nearly immediate'
Consumers have been grappling with higher car prices in the wake of the COVID-19 pandemic, with February's average new car price of roughly $48,000 up 25% from five years prior, according to Kelley Blue Book. Now, analysts say prices are set to see another dramatic hike.
Wedbush Securities analyst Daniel Ives says the average price of cars could increase anywhere from $5,000 to $10,000 'out of the gates.' Wheaton of Cornell says some non-luxury vehicles could see prices go up as much as $20,000 if automakers pass on tariff costs in full.
The impacts could be 'significant and nearly immediate,' Wheaton told USA TODAY.
It will take time for vehicles impacted by tariffs to arrive on lots, but Wheaton said dealerships will be expected to drop incentives even sooner, knowing demand is surging and incoming vehicles will cost more.
'If you were going to buy a vehicle and get a $3,000 rebate, now it may not have a rebate, or now it may say $500. So it (tariffs) can almost immediately go into effect, even if they don't change the MSRP,' he said.
The Trump administration has indicated that any price increase will be worth it. Trump told NBC News Saturday he "couldn't care less" if tariffs raise the price of vehicles.
'I hope they raise their prices, because if they do, people are gonna buy American-made cars. We have plenty,' Trump said.
Roughly half of new car inventory is assembled in the U.S., but even those cars rely on imported auto imports that may be subject to tariffs.
Ives called the concept of a U.S. automaker with 100% of parts from the U.S. a 'fictional tale,' and said it 'would take years to make this concept a reality.'
"Every automaker in the world will have to raise prices in some form selling into the U.S.," he said in a Monday note.
Advice for car buyers ahead of Trump tariffs
Despite looming price increases, auto experts cautioned against panic-buying a car, especially as some are not convinced the auto tariffs will hold.
'If I was already in the marketplace, I might speed up the research process, and I might just head down that road a little earlier than I was going to before,' said Brian Moody, executive editor for Kelley Blue Book. But 'I wouldn't necessarily commit dollars and cents, basing a decision on headlines.'
Joseph Yoon, consumer insights analyst at Edmunds, agreed that panic-buying is the wrong move. But for buyers already looking to buy a car within the next couple of weeks, it may be worth making the purchase sooner rather than later.
'Maybe pull your timeline up a couple days,' Yoon said. 'Especially if the car you're looking to buy is already available on the lot.'
Wheaton of Cornell advised anyone thinking about buying a new car within the next six to 12 months to consider speeding up their purchase. Because it will take time to cycle in new vehicles, he said buyers should have at least 30 days before imports hit with tariffs begin to take over dealership lots.
'It's a major investment. You want to make sure you get the right one that fits your personal needs,' he said. But 'the longer you wait, the less available inventory you have (of pre-tariff vehicles) on the lot.'