The impact of President Donald Trump’s 25% tariff on auto imports is already starting to show in the car market. According to a recent report from Edmunds, car buyers are adjusting their purchasing plans in response to the impending tariffs. While most prices have not been affected by tariffs yet, both analysts and customers are bracing themselves for price hikes in the near future.
The report reveals that 37% of new-car shoppers are considering moving up their car purchase to avoid the impact of tariffs, while 25% are planning to delay their purchases. This shift in consumer behavior indicates a growing concern over the potential impact of tariffs on car prices.
Despite the fact that tariffs have not yet significantly reshaped the market, a large percentage of buyers are already anticipating the impact on their purchasing options. While 31% believe that tariffs will somewhat influence their next purchase, a substantial 44% are convinced that tariffs will definitely play a role in their decision-making process.
Jessica Caldwell, assistant vice president of insights at Edmunds, noted that while there have been some targeted moves by automakers, such as adjusting suggested retail pricing on select models or limiting availability of certain vehicles, these actions have not led to widespread disruptions in the market. However, the looming threat of tariffs has prompted many automakers to increase sales by quickly offloading existing inventory before implementing price hikes.
In April, the average transaction price for a new vehicle only saw a modest 2.2% increase compared to the average transaction price in April 2024. While sales volumes have gone up, automakers have yet to implement the anticipated price hikes due to tariffs.
As the automotive industry braces for the impact of tariffs, uncertainty looms over when the full force of the tariffs will be felt. Companies are cautious about being the first to raise prices, but with profit margins at stake, it’s only a matter of time before prices are adjusted to account for the tariffs.
In conclusion, the automotive market is facing a period of transition as consumers and automakers navigate the impact of tariffs on car prices. While the market has not seen significant disruptions yet, the looming threat of tariffs is already shaping consumer behavior and industry strategies. Stay tuned for more updates on how tariffs will continue to influence the car market in the coming months.