Car shoppers face potential sticker shock as President Trump’s 25% tariffs on imported vehicles could push average new car prices past $50,000, making savvy buying strategies more crucial than ever.
At a Glance
- President Trump’s 25% tariffs on imported vehicles remain in effect despite a 90-day pause on most other tariffs
- Price increases could range from $3,000 to $15,000 per vehicle, pushing average new car prices above $50,000
- Certified Pre-Owned (CPO) vehicles offer a lower-risk alternative with manufacturer warranties
- Private sellers may offer better deals on used cars as they aim to close sales quickly
- Some manufacturers like BMW and Mercedes-Benz are temporarily absorbing tariff costs
Understanding the Tariff Impact
The automotive market is bracing for disruption as President Trump’s 25% tariff on imported vehicles remains in place. This policy applies to cars, SUVs, light trucks, and vans imported from Europe and Asia, while vehicles made in Canada and Mexico under USMCA face lower duties on U.S. content.
Experts estimate the tariffs will add between $3,000 and $15,000 to sticker prices, depending on make and model. Entry-level imports could see moderate increases, but high-end brands like BMW and Lexus could spike sharply—pushing average U.S. new car prices past $50,000.
Strategic Buying Options
With prices on the rise, timing becomes essential. Analysts recommend buying before dealerships fully adjust to tariff-induced cost pressures. Some automakers, including Ford and Stellantis, are offering employee pricing incentives to all buyers on select models, giving consumers short-term windows for savings.
Watch a report: Car Tariffs No Problem? Here’s How to Get the Best Deal.
India looks open to lowering its up to 110% tariffs on automobiles for the first time in decades as the world rewires its supply chains and trade alliances amid Trump’s latest brinkmanship https://t.co/ci7DTpvD8o
— Bloomberg (@business) April 23, 2025
Buyers open to flexibility should consider Certified Pre-Owned (CPO) options. These vehicles, typically only one to two years old, come with factory warranties and dealer inspections, offering security without new-car pricing. CPO inventory could be the “sweet spot” between affordability and quality as market dynamics shift.
Navigating the Used Car Market
Used vehicles are already seeing increased interest as tariffs make new imports more expensive. Marketplaces like AutoTrader.com allow buyers to filter listings by price, location, and model to compare offers, especially from private sellers, who often undercut dealerships.
“Private sellers usually look to close the best-priced deals at the earliest possible date, keeping prices at the lowest values,” notes car expert Arthur Jones. Savvy buyers can benefit by researching average values on platforms like Kelley Blue Book and negotiating directly with motivated owners.
Manufacturer Responses and Market Adjustments
Auto companies are responding differently to the pressure. BMW and Mercedes-Benz have pledged to temporarily absorb tariff costs, though industry observers doubt this approach is sustainable. Ford has leaned into nationalism with its “From America, for America” campaign, highlighting its domestic manufacturing footprint.
Industry analyst Will Hardeman cautions, “It has yet to be seen who will bear these ultimate costs… I think it will be shared across the board.” With the final retail price shaped by supply chain costs, dealership markups, and consumer demand, buyers must stay nimble.
Ultimately, whether the tariffs are rolled back or intensified under future administrations remains to be seen. For now, car shoppers must adapt—relying on research, flexibility, and nontraditional buying channels to navigate a high-stakes auto market.
