Tariffs on Cars and Parts: What You Need to Know

• What is the reason for tariffs on cars? A White House fact sheet says the tariffs “protect America’s automobile industry.” 
• How will tariffs impact the purchase of a car? Tariffs for new cars priced under $40,000 could impact them by as much as $6,000 per vehicle.
• What do tariffs really mean to Americans? Tariffs mean the government levies taxes on cars (and soon parts) coming into the U.S., and those costs typically get passed on to consumers.

If you’re considering buying a new or used vehicle or need to maintain your existing one, you may wonder how the 25% tariffs on imported vehicles entering the United States will affect your bottom line. The tariffs began on April 3. Additionally, current plans call for 25% tariffs on imported car parts by May 3.

The good news for new car shoppers is that many carmakers stocked up on vehicles in preparation for tax refunds and the spring selling season. It’s not too late to shop for a vehicle before tariffs potentially increase car costs. For used car buyers, prices have remained elevated due to insufficient inventory. Prices could soar higher from new car shoppers flooding the used market to avoid costs carmakers may pass along to consumers.

While much still needs sorting, we break down what we know.

• What Is the Reason for Tariffs on Cars?
• How Much Will Tariffs Impact Car Costs?
• How to Tell Where Your Car and Its Parts Are Made
• Costs Could Go Up on Vehicle Maintenance

What Is the Reason for Tariffs on Cars?

President Trump’s tariffs on imported cars entering the U.S. took effect April 3 to “protect America’s automobile industry.”

However, every car built in the U.S. includes many parts from other countries. Carmakers also build about half of all vehicles sold in the U.S. elsewhere.

“What most American consumers will be surprised by is that traditionally, the domestic brands may not actually be built in the U.S., and traditionally cars thought of as imports are already built in the U.S.,” said Autotrader executive editor Brian Moody.

How Much Will Tariffs Impact Car Costs

For new cars priced under $40,000, Cox Automotive economists say prices could increase as much as $6,000 per vehicle, including on many of the most popular models.

Additionally, plans call for 25% tariffs on car parts by May 3. While this situation is fluid — we’ve watched dates move, percentages fluctuate, and details change – costs will likely go up on car parts as well.

How to Tell Where Your Car and Its Parts Are Made

Your 17-digit VIN contains characters to help you decipher key details about where your vehicle was made, its model year, the assembly plant, and more. For information about the origin of parts, check the window sticker on the car you want to purchase.

VIN Decoder: Where a Car Was Manufactured and More

If you know how to decode your vehicle identification number or VIN, you can determine where a manufacturer assembled your vehicle. It also provides other essential information, like the year the company built your vehicle and the location of the assembly plant. Read more about VIN decoders: Where Is the VIN Number on a Car.

Car Window Sticker: How to Tell Where Car Parts Come From

The car parts content information is a bit more confusing. For example, a window sticker from a 2024 Hyundai Tucson SEL shows that 50% of car parts come from the United States and Canada, and 15% of “major sources of foreign parts content” comes from South Korea. The parts content does not include final assembly, distribution, or other non-parts costs. The Tucson’s final assembly point was in Montgomery, AL. Not only will this increase new car prices if carmakers pass along the costs, but it could also impact car maintenance. Read on.

Costs Could Go Up For Vehicle Maintenance

Maintaining your vehicle could cost more if the 25% tariffs on part costs get passed on to consumers. Dealership and body shops source imported parts that are exactly like or similar to the ones originally used to make your vehicle. If you lease a vehicle, contract terms often state that you must maintain the vehicle according to manufacturer specifications. That often means using original manufacturer parts.

Read more about window stickers. Stay abreast of the latest information to determine how pricing affects your purchase and keep your car maintained and operating in top condition.

RELATED: Should You Buy a Used Car in 2025?