Car Buyers’ Window To Dodge Tariffs Is Closing: What You Need To Know
President Donald Trump’s proposed tariffs are looming over the United States at this point. While the tariffs are supposed to encourage more people to buy American and push companies to bring business (and jobs) here, it is going to have a significant impact on the automotive industry. Vehicle prices are expected to climb in the coming months, but the tariffs haven’t yet been rolled out. So, if you’re in the market for a new car, now may be the time to act. Here’s why.
Understanding the Impending Tariffs
Before we jump into timing your purchase just right, you should have a good understanding of what the impending tariffs mean for you and your potential car purchase. Trump announced plans to impose tariffs on various imported goods, including automobiles and automotive parts. These measures aim to protect domestic industries but are likely to result in higher prices for consumers. The proposed tariffs could add up to 25% on imported vehicles, significantly impacting the overall cost. Even domestically produced cars may see price hikes due to increased costs of imported components. Estimates suggest that the average price of a new car could rise by several thousand dollars.
Imported automotive brands are particularly vulnerable to the upcoming tariffs. Companies like BMW and Bentley have already expressed concerns about the financial impact. BMW anticipates that the tariffs will cost the company €1 billion this year, affecting their financial performance. Bentley has indicated that the costs of U.S. tariffs might be passed on to consumers, especially after a decline in demand from other markets.
Domestic Manufacturers and the ‘Chicken Tax’
Domestic manufacturers are not immune to the effects of tariffs. The longstanding 25% “chicken tax” on imported trucks has historically protected U.S. automakers but has also limited consumer choices. This tax has compelled most truck production to occur in North America, predominantly by American brands like General Motors, Ford, and Stellantis. The new tariffs could further strain domestic manufacturers, leading to higher prices even for vehicles produced within the United States.
The implementation of U.S. tariffs has prompted discussions of retaliatory measures from other countries. The European Union and Canada have announced plans for counter-tariffs on U.S. goods, escalating trade tensions. These actions could further disrupt the global automotive supply chain, leading to additional cost increases and potential shortages of certain models.
Timing Your Purchase
At this point, it’s all about timing your purchase of a new car. If you’re in the market for a vehicle in 2025, buying before the tariffs are implemented could make a huge difference. You might even find that dealerships near you are offering promotions ahead of the probable price hikes. As always, it’s a good idea to research the current market trends. You can consult local dealerships and other professionals to help you pinpoint the best time to buy. In the end, being proactive will likely go a long way in shielding yourself from the incoming tariffs.
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Drew Blankenship is a former Porsche technician who writes and develops content full-time. He lives in North Carolina, where he enjoys spending time with his wife and two children. While Drew no longer gets his hands dirty modifying Porsches, he still loves motorsport and avidly watches Formula 1.