Navigating the New Auto Tariffs: What Every Car Buyer Needs to Know

Navigating the complexities of the automotive market can be challenging, especially with the introduction of new tariffs on imported vehicles and parts. On April 3, a 25% tariff was imposed on a wide range of imported passenger vehicles and light trucks. This change is expected to significantly impact car prices, maintenance costs, and market dynamics. From identifying affected vehicles to exploring strategies for cost savings, we cover everything you need to know to stay ahead in this evolving landscape.

Recent Developments

• May 13, 2025: Nissan said it plans 11,000 additional job cuts, bringing its total layoffs to 20,000 workers. It previously announced a workforce reduction of 9,000 people. The Japan-based company will also reduce the number of automotive plants from 17 to 10 locations.
• May 12, 2025: The United States will get a 90-day reprieve on tariffs for imported Chinese goods, though it will have little impact on car prices. According to the Associated Press, “the U.S. agreed to drop its 145% tariff rate on Chinese goods by 115 percentage points to 30%, while China agreed to lower its rate on U.S. goods by the same amount to 10%.” The three-month pause will allow for additional trade talks.
• May 7, 2025: According to Reuters, Ford sent a notice to U.S. car dealers stating that the company would increase prices by “as much as $2,000” on its most affordable pickup truck, the Maverick, along with the Ford Mach-E electric vehicle, and the Bronco Sport. All three vehicles are made in Mexico. The price increases took effect on May 2.
• May 5, 2025: Ford, which sells the F-150 and makes 80% of its vehicles in the U.S., said tariffs will impact the automaker by $1.5 billion this year before interest and taxes.
• May 1, 2025: GM sent a letter to its shareholders stating that tariffs will cost the company between $4 billion and $5 billion in 2025. The company also adjusted its corporate earnings guidance. How tariffs will affect the consumer pricing of vehicles remains unclear. … Ford reported its sales increased 16% in April and extended its employee pricing to consumers through July 4. Ford makes 80% of its vehicles in the U.S., and the Ford F-150 is the top-selling automobile by total new units sold.
• April 30, 2025: According to a White House fact sheet on tariffs on car parts: “If a manufacturer builds a car in the U.S., that has 85% U.S. or USMCA (United States-Mexico-Canada) content, the manufacturer effectively will not owe tariffs on that vehicle’s production for the first year.” However, on a car built in the U.S., using 50% of U.S. or USMCA content, “the manufacturer effectively only pays on 35% for the first year.” The 25% tariffs on car imports remain in place.
• April 29, 2025: President Trump signed a pair of executive orders leaving the 25% tariffs on imported car parts in place. However, the orders walk back some tariffs. The orders allow automakers who pay existing car import levies to avoid additional tariffs on some imports from Canada or Mexico, and on steel and aluminum. Additionally, automakers can qualify for up to a two-year reprieve on car parts. Stay tuned for additional details as they come.
• April 25, 2025: Cox Automotive’s Charlie Chesbrough told CNBC, “Concerns about potential future vehicle prices due to tariffs led to a surge in March sales, and April began with similar robustness.” Chesbrough is a senior economist, and Cox Automotive is Autotrader’s parent company. Cox data show that new vehicle sales were running 22% ahead of the seasonally adjusted pace of last year and rose more than 8% through early April on a volume basis.
• April 21, 2025: According to the Manheim Used Vehicle Value Index, car buyers will likely see used car prices go up in the next six to eight weeks. The index tracks prices that car dealers pay for used cars at auctions. It takes nearly two months for those to trickle down to shoppers. Jeremy Robb with Cox Automotive, the parent to Autotrader and Manheim, said wholesale markets appear impacted by tariffs. The market, “turned on a dime the last week of [March] and into early April as tariffs were implemented,” said Robb, senior director of Economic and Industry Insights.
• April 17, 2025: Automotive News reported that a Ford executive sent a memo to dealers saying that while pricing remains through June 2, prices will go up with next month’s production. “In the absence of material changes to the tariff policy as articulated to date, we anticipate the need to make vehicle pricing adjustments in the future, which is expected to happen with May production,” said Andrew Frick, president of Ford Blue and Model e, in the memo.
• April 16, 2025: With tariffs looming for auto parts, counterfeiting is top of mind as a growing industry concern. The Center for Auto Safety‘s executive director Michael Brooks told Automotive News, “There are thousands of different automotive parts that are being counterfeited overseas and shipped to the United States,” he said, adding that tariff-related auto parts increases will, “make that an even larger market.”
• April 15, 2025: While it’s still unclear if 25% car tariffs will stick and if parts tariffs will go into effect by May 3, Automotive News reports that Patrick Manzi, chief economist of the National Automobile Dealers Association (NADA), recently told an audience at the Finished Vehicle Logistics North America conference, that tariffs will impact average U.S. household disposable income by $3,800.
• April 14, 2025: The White House could reverse its stance on 25% car and parts tariffs, at least for now. Trump said, “I’m looking at something to help some of the car companies. They’re switching to parts that were made in Canada, Mexico, and other places, and they need a little bit of time because they’re going to make them here, but they need a little bit of time.”
• April 11, 2025: Tariffs and tax refunds had car shoppers snapping up available new and used inventory last month. As a result, new and used car inventory tightened up at the start of April, the latest analysis from Cox Automotive of vAuto data shows. For used cars, March is typically the strongest sales month of the year, and it was the strongest since 2021. Used car sales were up 12% compared to last year, the analysis shows. If shopping for a car right now, new car shoppers will find more inventory of cars like Jaguar, Lincoln, Dodge, Ram, Infiniti, and Mini, though not a lot of options for Lexus, Toyota, Honda, and Subaru vehicles. See our article on buying a used car right now.
• April 10, 2025: Automotive News reports that Volvo will end production of its S90 due to tariffs. The China-built luxury sedan is not a top seller in the U.S. Last year, Volvo pulled the S60 from its lineup.
• April 9, 2025: The White House enacted a partial, 90-day hold on some tariffs, then later said it does not include new cars and car parts. Tariffs on those will remain in effect. We will continue to provide updates as they come. Additionally, the Financial Times reports that American shipping ports are getting clogged with cars, including Audi, Jaguar Land Rover, and Aston Martin.
• April 8, 2025: Mercedes-Benz told Automotive News that it will hold car prices steady for 2025 models, though no timeframe was provided. Additionally, Toyota and Honda expect to keep prices the same on 2025 cars, Japanese media reports said. According to the latest Cox Automotive vAuto Live Market View, Lexus, Toyota, Honda, and Acura had the lowest inventory. Cox Automotive is Autotrader’s parent company.
• April 7, 2025: Hyundai said in a statement to Autotrader that the company “will not raise MSRP for its current model lineup for the next two months.” The same goes for Genesis, the automaker’s luxury brand. The pledge will last until June 2. Additionally, the automaker confirmed it will end its complimentary maintenance on 2026 Hyundai models. Typically, complimentary maintenance plans last 3 years or 36,000 miles. According to news reports, Jaguar and Land Rover shipments to the U.S. are paused for April, so a tariffs plan can be developed.
• April 4, 2025: Stellantis, the makers of Jeep, Chrysler, and other vehicles, confirmed to Autotrader that the automaker will temporarily idle plants in Mexico and Canada, affecting 900 workers this month at those locations. The Canadian plant makes the Chrysler Pacifica minivan and the Dodge Charger Daytona EV. The Mexico plant manufactures the Jeep Compass SUV and the Jeep Wagoneer S EV. As a result of the idled plants, “temporary layoffs will occur” at Michigan and Indiana plants. The layoffs will be at the Warren Stamping and Sterling Stamping plants in Michigan and in Indiana, the Transmission Plant, Kokomo Transmission Plant and Kokomo Casting Plant. Additionally, Automotive News is reporting that Volkswagen will add the tariff to the window sticker of every new car as an “import fee.” The company has not confirmed the report.
• April 3, 2025: In response to tariffs, Ford Motor Co. announced that the company is offering its employee pricing to all consumers on most of its 2024 vehicles and 2025 Ford Explorer and Lincoln Aviator models through June 2. The company builds 80% of its U.S.-sold vehicles domestically. Additionally, the automaker extended the timeframe of its free electric vehicle (EV) home charger program with complimentary installation through June 30. Vehicles not part of the pricing discount include the Ford Raptor and the Mustang Dark Horse.
• April 2, 2025: The White House announced 25% tariffs on imported cars that will take effect on April 3. The president also said automakers like GM, Honda, Nissan, Hyundai, and others have committed to investing billions in the United States.
• March 28, 2025: A group representing General Motors, Toyota, Volkswagen and other major automakers warned that new 25% tariffs President Donald Trump plans to impose on imported vehicles will hurt U.S. consumers.
• March 26, 2025: President Trump said he would impose a 25% tariff on all cars on April 3 and car parts by May 3 that are shipped into the United States, including American brands whose automobiles are assembled overseas. 
• March 5, 2025: The White House delayed the implementation of tariffs on imports from Canada and Mexico, initially set for March 21. Following negotiations with leaders from both countries, the tariffs will now take effect on April 3. Also, a 25% tariff on imported car parts that will affect auto manufacturers, will roll out no later than May 3. 

Questions You May Have

• How Will Tariffs Impact the Prices of Cars? 
• Can I Still Afford a Car with Tariffs? 
• Should I Buy a New or Used Car with the Tariffs? 
• How Can You Tell if a Car on the Lot Is Impacted By Tariffs? 
• How Long Will Car Tariffs Last? 
• Tariffs: How to Save Money When Buying a Car 

How Will Tariffs Impact the Prices of Cars? 

Prices for new cars could increase by as much as $6,000 per vehicle on models under $40,000. This significant hike is due to the added cost of importing vehicles and parts, which manufacturers will likely pass on to consumers. As a result, both new and used car markets will be affected, with potential ripple effects on financing and insurance costs. 

Can I Still Afford a Car with Tariffs? 

Yes, it’s possible to find and buy an affordable car despite the 25% tariffs imposed by the government on new cars and parts entering the country. It’s anyone’s guess how the 25% tariffs on imported car parts will affect auto manufacturers, since those will roll out no later than May 3. 

If buying a car right now, you may consider: 

• Expediting your purchase: You could save money if you act now before the full effect of tariffs is reflected in new car prices. 

• Exploring alternatives: It’s always wise to look around and investigate other car buying options, like an entry-level trim instead of a fully loaded vehicle, especially if dealers add tariff markups. If markups become more prevalent, such as they were during the COVID-19 pandemic, consider shopping around, even outside your area. You might also consider leasing a car or buying a used vehicle, including certified pre-owned (see the next section). 

Don’t forget that beyond the car itself, you need to consider interest rates, loan terms, fees, and how much of a down payment you can afford to make. Those will affect the total purchase price. Additionally, you need to factor in total ownership costs like car loan interest, depreciation, fuel, insurance, and maintenance. 

See how much you can afford using our car affordability calculator.  

Should I Buy a New or Used Car With the Tariffs?  

Buying a used car may make the most financial sense if new car prices start climbing or dealers begin marking up vehicles due to tariffs. Additionally, new vehicles depreciate more quickly.  

Used cars avoid tariffs because they are already past the point of import, so they don’t apply. Additionally, used cars will not face the potential markups that tariffs could cause on new vehicles. 

For example, buying a used full-size pickup truck makes sense should prices increase further. In the last several years, new truck prices have increased exponentially, making used trucks a better deal anyway. 

See our best new car and new truck deals.

How Can You Tell if a Car on the Lot Is Impacted By Tariffs? 

To determine the origin of a vehicle and its parts, consumers can use the following to see how a car on a dealership lot is impacted by tariffs: 

• Vehicle identification number (VIN): A car’s VIN is found in the vehicle, including inside the driver’s-side door jamb and driver’s-side dashboard. The VIN provides information about the country of vehicle manufacture. 

• Car window sticker (Monroney label): A car’s window sticker lists the percentage of domestic and foreign parts used in the car.  

This information can help shoppers make informed decisions about which vehicles might be less affected by the tariffs. 

How Long Will Car Tariffs Last? 

While permanent, tariffs on cars and parts will likely be influenced by ongoing discussions between the United States and its trade partners. Consumers should stay informed about any changes or updates to the tariff policy when making car-buying decisions. 

Tariffs: How to Save Money When Buying a Car

At this time, there are no real markups seen on cars. We will continue to monitor this situation. 

Related Content