Impending auto tariffs are presenting car buyers with a significant dilemma: should you accelerate your plans to purchase A New Car before prices potentially surge? With tariffs expected to take effect soon, industry experts suggest that acting swiftly might save you thousands of dollars on your next vehicle.
As tariffs loom, poised to inflate vehicle costs, understanding the implications for buying a new car is crucial. Experts interviewed by ABC News recommend that consumers who are considering a new car seriously evaluate making a purchase sooner rather than later. However, they also emphasize the importance of thorough research, including comparing prices and securing favorable financing options.
The exact timing of price increases remains uncertain. Some predict they could occur as early as next week, while others suggest it might take a few months, as dealerships deplete their current tariff-free inventory. This ambiguity itself is a compelling reason to consider expediting a purchase, according to industry analysts.
“Anticipate a surge of customers at dealerships in the immediate future,” notes Joseph McCabe, President and CEO of AutoForecast Solutions. “Many are eager to buy a new car now, aiming to preempt the financial impact of tariffs, the magnitude and timing of which remain unclear.”
Understanding the Tariff Impact on New Car Prices
The 25% auto tariffs, slated to be implemented on April 3rd, will apply to a broad spectrum of imported passenger vehicles. This includes not only cars, but also SUVs, minivans, cargo vans, and light trucks, as outlined in a White House statement released following President Trump’s remarks.
Analysts broadly anticipate that these tariffs will drive up the prices of foreign-made cars. Importers are likely to pass a significant portion of the tax burden onto consumers.
Interestingly, even domestically produced cars are not expected to escape price hikes. U.S. manufacturers will face increased costs for imported parts and a surge in demand as buyers look towards domestic alternatives. This confluence of factors suggests a widespread increase in vehicle prices across the board.
“The situation is multifaceted, but the bottom line for consumers is straightforward: the price of a new car is poised to increase,” explains Kimberly Palmer, a personal finance expert at NerdWallet. “If you’re already planning to buy a new car and have factored it into your budget, accelerating your purchase timeline could be a prudent move.”
Aaron Bragman, Detroit Bureau Chief at Cars.com, puts it bluntly: “If you’re in the market for a new car, aim to make your purchase now, if feasible.”
Dan Ives, Managing Director of Equity Research at Wedbush, forecasts a substantial tariff-related price increase for new car buyers in the U.S., estimating a range of $5,000 to $10,000 per vehicle.
Art Wheaton, Director of Labor Studies at Cornell’s School of Industrial and Labor Relations, specializing in the auto industry, suggests the potential added cost could escalate to as much as $20,000 per vehicle.
The extent and timing of these price increases will likely fluctuate based on factors such as where a particular model or its components originate, and how manufacturers assess their customers’ ability to absorb higher prices.
President Donald Trump during a ceremony in the Oval Office, March 28, 2025. The looming auto tariffs introduced during his administration have sparked concerns about rising new car prices.
Experts also suggest that a potential surge in demand in the coming days and weeks could further inflate prices. As more consumers rush to dealerships to buy a new car before tariffs take full effect, this increased demand could exacerbate price pressures, pushing costs even higher.
“If there’s a widespread rush to purchase a new car, prices will inevitably rise further,” cautions Prasad Venkatesh, Senior Vice President of Research and Chief Innovation Officer at the Center for Automotive Research.
Ripple Effect on the Used Car Market
The tariffs are not only expected to impact the new car market but also to drive up prices for used cars. As new cars become more expensive, many consumers will naturally turn to the pre-owned market, increasing demand and consequently, prices for used vehicles as well.
Furthermore, some analysts predict that manufacturers might discontinue production of certain lower-priced models altogether in response to the tariffs. Joseph McCabe suggests that some carmakers may find it challenging to maintain profit margins on more affordable vehicles while absorbing the additional tax burden.
“Vehicles in the more budget-friendly segment, perhaps those priced below $30,000, could potentially be squeezed out of the market,” McCabe warns. This could limit options for consumers seeking a new car at a lower price point.
Cautions Before You Rush to Buy a New Car
While the urgency to buy a new car before tariffs take hold is understandable, it’s crucial to consider potential downsides.
Elevated interest rates have already pushed borrowing costs for car loans upwards. This means that even if you manage to secure a vehicle before significant tariff-related price hikes, you might still face substantial monthly payments due to higher interest on your auto loan.
Personal finance expert Kimberly Palmer advises caution against rushing into a car purchase if you are not fully prepared. “Buying a new car is a major financial undertaking with long-term implications. It’s a significant expense that profoundly affects your finances. Therefore, it’s unwise to rush if you’re not genuinely ready.”
Typically, prudent car buyers should review their credit reports and rectify any errors to secure better loan rates. However, this process can take several weeks. Similarly, comparison shopping for the best deals requires time and thorough research.
Moreover, it’s worth noting that auto tariffs are also expected to increase the costs of car repairs and insurance, making overall car ownership more expensive in the long run.
Making an Informed Decision About Buying a New Car
In conclusion, the impending auto tariffs present a compelling reason to consider purchasing a new car sooner rather than later if you are already in the market. However, it’s vital to balance the potential savings from avoiding tariff-related price increases with the need for careful financial planning and due diligence. Don’t let the urgency of the situation overshadow sound financial practices. Research your options, compare prices, explore financing, and ensure that buying a new car aligns with your overall financial situation. Making an informed decision is key to navigating these tariff-induced market changes effectively.
