Car Prices Could Skyrocket Soon Under Trump’s Tariff Plan

If you’re thinking of buying a new car soon, you may want to act fast. Auto experts and economists are warning that car prices could rise by thousands of dollars due to a potential return of Trump-era tariffs on imports, and the impact could be felt much sooner than most Americans expect.

Former President Donald Trump has pledged to impose a 10% tariff on all imports if re-elected in 2024, a move he believes will boost American manufacturing and reduce dependency on foreign goods. However, experts argue this sweeping plan could have a serious and immediate impact on one of the country’s most important consumer markets — the automobile industry.

According to a study from the Center for Automotive Research (CAR), even a 10% tariff could raise new car prices by as much as $3,000 to $6,000, depending on the make and model. That’s because most cars sold in the U.S. — even by American brands — are made with parts sourced globally, and automakers say they would have no choice but to pass the extra cost on to consumers.

Why Car Will Prices Increase So Fast?

Unlike some economic policies that take years to fully unfold, tariffs have an almost immediate effect on prices. The moment the government announces and enacts the tariffs, importers must pay higher duties to bring vehicles and parts into the country. Since most automakers don’t keep large inventories of cars or components, those higher costs start to show up on dealership price tags within weeks or even days.

“The supply chain is global,” says Kristin Dziczek, an industry analyst. “Even vehicles assembled in the U.S. have 30–50% of their parts coming from overseas. A 10% tariff across the board would create massive cost pressures instantly.”

Consumers Will Pay the Price

The average price of a new car in the U.S. already sits at around $47,000, according to Kelley Blue Book. If Trump’s tariff plan goes into effect, experts say the average price could jump to over $50,000 for many popular models. For families on tight budgets or those financing a vehicle, that increase could add $80–$150 per month to their car payments.

Used car prices could also rise, as more consumers turn to the pre-owned market to avoid expensive new models. That would increase demand — and prices — across the board.

Who Gets Hit the Hardest?

Middle-class and working-class Americans are expected to bear the brunt of the price hike. “This is effectively a tax on consumers,” says Chad Bown, senior fellow at the Peterson Institute for International Economics. “You’re making cars more expensive for the average American household, and that doesn’t even include the potential job losses from lower auto sales.”

Industry insiders point out that many entry-level and fuel-efficient models — such as the Toyota Corolla, Honda Civic, and Hyundai Elantra — are either imported or made using a high percentage of foreign parts. These models are usually targeted by budget-conscious buyers, who are least able to absorb a sudden price surge.

Auto Industry Sounds the Alarm

The auto industry is voicing strong concerns. The Alliance for Automotive Innovation, which represents major automakers in the U.S., has publicly stated that tariffs could “destabilize the automotive market, reduce sales, and slow innovation.”

They also warn that automakers may delay or cancel planned investments, including in electric vehicles and domestic factories, if trade costs become unpredictable. These kinds of decisions could affect not only consumers but also tens of thousands of American jobs.

Potential Ripple Effects

The consequences won’t stop at the dealership. If car sales slow down, so will auto financing, insurance, repairs, and aftermarket services. With fewer cars being sold, cities and states could also see lower tax revenues from registration fees and sales taxes.

Meanwhile, countries that export vehicles or parts to the U.S. — including Japan, South Korea, Germany, Mexico, and Canada — may retaliate with tariffs of their own, which could impact other American exports, including agriculture and industrial equipment.

Timing Matters

Although Trump’s tariff plan is still a campaign proposal, the auto industry is already preparing for the possibility. Dealers may try to stockpile inventory or offer aggressive promotions now to move cars before prices go up. If the policy is announced in early 2025, consumers could see higher prices as soon as spring or summer of that year.

Should You Buy a Car Now?

For those on the fence about buying a vehicle, experts say this might be the time to act. “If you know you’ll need a car in the next 6–12 months, buying sooner rather than later could save you thousands,” says Jessica Caldwell, executive director of insights at Edmunds.

However, buyers should still be cautious and not rush into bad financing deals just to beat a possible price hike. It’s important to consider interest rates, insurance costs, and overall affordability.

Final Thoughts

Trump’s proposed tariff may sound like a long-term policy shift, but its impact on car prices could be immediate, widespread, and painful for everyday Americans. While the goal may be to protect American industries, the reality is that the modern auto industry is deeply global, and any disruption to that system could cause real financial strain on millions of drivers.

As the 2024 election approaches, this issue is sure to be a major point of debate — and a pocketbook concern for voters.

Link for More Information
For detailed insights on how tariffs impact car pricing and the global auto industry, visit https://www.cargurus.com/Cars/articles/car_price_trends_and_tariffs

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