Why Trump tariffs, supply issues could make spring and summer the worst times to buy a car
President Trump's tariff policy has sent shockwaves through the auto industry following 'Liberation Day'. Here's why tariffs and supply issues will make car buying more difficult to navigate in 2025.
- The Trump administration's mass tariffs are wreaking havoc on the auto industry.
- Automakers are strategically adjusting production and shipping strategies to prepare for increased costs.
- Price increases and supply delays spell doom for new car buyers in search of great deals in spring and summer.
President Donald Trump’s mass tariffs have baffled Americans, creating uncertainty for the average consumer, according to industry leaders.
JPMorgan Chase’s chief executive, Jamie Dimon, has called Trump’s tariff policies “disastrous”. Even Senior Advisor to the President, Elon Musk has expressed sentiments on free trade (with Europe) that deviate from the direction of the administration.
So, what do mass tariffs mean for folks looking to buy a new car in 2025?
How do tariffs affect the auto industry?
‘Liberation Day’ has come and gone, yet millions of Americans are feeling anxious and ensnared by Donald Trump’s tariff policies after April 2. The United States hasn’t issued a tariff hike this impactful since the Smoot-Hawley Tariff Act of 1930. The Smoot-Hawley Tariff act lit the fuse for a global trade war. Today, economists fear the current administration’s policies could have a similar effect. Dealers and car buyers are biting their nails and bracing for impact as the current auto market becomes more difficult to navigate for all parties.
Buying a new car is rarely simple, but the second and third business quarters of 2025 present specific challenges that many dealers and shoppers have yet to encounter. The market is ice-cold for several huge automakers like Stellantis, who manufactures Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Maserati and many other popular automotive brands. In December, automotive publication Carscoops, reported that thousands of Dodge Chargers and Challengers had been sitting on dealer lots for record times. This is a clear indication of dwindling demand for certain vehicles.
Why isn’t it a good time to buy a new car?
A lack of demand is an issue for dealers and automakers, but tariffs could cause supply issues for consumers as well, creating a nightmare scenario. Several major automakers like Audi and Volkswagen have paused shipments to the United States to avoid paying outrageous import tariffs. The Trump administration announced a 20% tariff on imports from the European Union, a 26% tariff on imports from India, and a whopping 34% on imports from China. So, thousands of vehicles are sitting on dealer lots for record times and popular models that are actually in high demand could face serious shipping delays (and price hikes).
Typically, car dealers roll out incentives in anticipation of American tax returns during the second quarter, but this year dealers and consumers are in a tug-of-war that consists of the former looking to offload inventory and the latter looking for attractive deals. It isn’t a great time to buy a new car because all signs point to sticker price increases across the board to survive the impact of import tariffs. Additionally, tariffs on auto parts are expected to be announced by May 3. This will likely cause price increases as well because vehicles will cost more to manufacture. So, what about used models?
Do auto tariffs apply to used cars?
Not every American is willing to pay a premium for a new car. In fact, purchasing a lightly used model that has a history of reliability and experienced depreciation is often a better deal than a new car. Unfortunately for consumers, even used models aren’t safe from the shockwaves caused by mass tariffs.
Tariffs may not be directly related to the used car market, but a heightened demand caused by a certain supply shortage of new imported models equates to higher used car prices. Since many automakers will follow in the footsteps of Audi and Volkswagen, new car imports will be delayed, making used cars much more readily available. Demand for used cars will ultimately increase, driving prices higher.
Should you plan on buying a car this spring?
If you’re looking for a car this spring or summer, it’s slim pickings in terms of great deals due to tariff turbulence. Ideally automakers will find their footing and adapt their production strategies for the mutual benefit of sales and consumers. That said, Rome wasn’t built in a day, and it will take more than steep tariffs to restore America to its former manufacturing glory.
President Donald Trump declared "sometimes you have to take medicine to fix something" in response to questions regarding the stock market's recent freefall. Car buyers should prepare for the bitterness of these tariff policies before expecting any sweet relief in the market any time soon.