President Donald Trump’s recently announced tariffs will significantly affect the cost of buying a new or used car. With these tariffs in place, you will very likely experience a dramatically different car purchasing and ownership experience. 

Here’s a brief explainer on how Trump’s auto tariffs affect buying a new (or used) car. 

What is an Auto Tariff?

A tariff is a tax imposed by a government on imported goods. As such, an auto tariff is a tax imposed on cars imported into the United States. 

Which Cars Will Be Affected by Auto Tariffs? 

Nearly every automaker will be affected by the new auto tariffs or the incoming tariff on car parts. In 2024, the United States imported nearly 8 million cars. It accounted for nearly half the cars sold in America.

How Will Auto Tariffs Affect Buying a New Car? 

President Trump placed a 25% tariff on cars from other countries that are shipped to America. It includes some of the most popular car brands in the world, like Toyota, Honda, Lexus, Nissan, BMW, Mercedes, and others that are shipped from countries like Japan and Germany. This will be applied to new cars that are coming into the country.

Some experts believe tariffs will increase retail car prices by several thousand dollars due to supply and demand, as well as other factors. They believe the tariffs will force automakers to send fewer cars to the United States leading to a lower supply of new vehicles. A lessened supply would likely increase demand. The increase in demand will almost certainly lead to higher prices. 

How Will Auto Tariffs Affect Buying a Used Car? 

Buyers in the market for a used car will also be affected by the auto tariffs. Experts believe the increase in prices for new cars will send many to used car lots in hopes of a better deal. The influx of buyers will increase demand. As noted in the last section – where there’s an increase in demand, there is usually a price increase. 

Will Auto Tariffs Affect Me If I’m Not Buying a Car?

If you’re not looking to buy a car there’s a good chance you’ll still be affected. More tariffs are scheduled for May, and will focus on auto parts. The tax rate is unknown at the moment. However, you should expect to see an increase in prices to service and repair your vehicle as car parts will cost more money. 

If you find yourself in this category, understand it’s never been more important to be mindful about how you’re spending your money. Achieva has tips for sticking to a budget and what you can do to prioritize your expenses.

What Are Automakers’ Response to the Auto Tariffs?

Some automakers have said they won’t raise prices until the second round of tariffs goes into effect in May. Others, like Hyundai, said they wouldn’t raise prices for their current lineup until at least June. 

In the meantime, news of the tariffs has led many consumers to rush to dealerships to purchase a new car before it fully takes effect. If you’re in the market for a new car, it’s never been more imperative to get a great rate on your auto loan, or refinance your current rate. 

Speak to an Achieva advisor today if you’re looking to finance a new car purchase. 

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