25% tariffs on foreign cars & auto parts now in effect

[Ali Gator]

If you haven't bought a new car yet, and have been just 'thinking about' it, it may have cost you. New car buyers most likely will be paying a 'few thousand' to 'fifteen thousand' dollars added to the price starting this weekend, as dealers are now starting to re-stock their inventory and have been hit by the new tariffs at the docks. This is according to Michael Wayland, a global automotive reporter. He reports the current  'average' cost for a new imported vehicle is $47,500. 

Wayland says though the tariffs on imported cars have been in effect for the past few weeks,  we haven't seen this added to prices because dealers had been selling their current inventory, bought pre-tariff. However, dealers across the country say their inventory has been depleted and the 'new inventory' came onto their lots this week,  with tariff prices added on. 

Auto parts are also arriving at automotive centers as they restock their inventories, and the tariffs are being added on, so you will have to pay much more to repair your older cars. Warren cautions in addition to new cars and auto parts, drivers will see their insurance prices skyrocket with renewals in the coming months, due to the increase in auto parts to repair cars. 

[+ Vegas_Millennial]

I just bought a new car last year, made in the US.  Every car my family has ever owned in my lifetime has been made in the US.  We won't even look at buying a foreign car.  We figure we can't complain about losing jobs overseas if we're part of the problem by buying imports.

[+ sync]

2 hours ago, Vegas_Millennial said:

I just bought a new car last year, made in the US.  Every car my family has ever owned in my lifetime has been made in the US.  We won't even look at buying a foreign car.  We figure we can't complain about losing jobs overseas if we're part of the problem by buying imports.

When considering the scale and scope of imported car parts, the cars here are foreign with American labels:

[Luv2play]

3 hours ago, Vegas_Millennial said:

I just bought a new car last year, made in the US.  Every car my family has ever owned in my lifetime has been made in the US.  We won't even look at buying a foreign car.  We figure we can't complain about losing jobs overseas if we're part of the problem by buying imports.

The car you bought last year I am assuming was assembled in the US, if you bothered to ask. Many consumers of “American” cars have no idea where their car was assembled.

I have a 2024 GMC Terrain and have no idea where it was assembled. I live in Canada. When I bought it last May the origin issue was irrelevant since the North American Free Trade Agreement covered it. No longer is that the case. 

Now of course with all these new tariffs introduced by the American Administration the question of where it was assembled, what proportion of North American parts it has, and what proportion of foreign parts, is all relevant. Depending on the answer the car you bought may no longer be deemed to be American.

GM has just announced it is shifting some production of its Silverado trucks from Oshawa Ontario to the States. The remaining production in Canada presumably can be sold to Canada. Stellantis has also made a similar move. This is just the beginning. 
No-one can say where this will all end. 
 

Even now it is difficult to determine what the tariff situation is and what might change by next week. Today, May 3rd, a whole bunch of new auto tariffs were introduced. It’s a chaotic situation.

[+ Vegas_Millennial]

1 hour ago, Luv2play said:

GM has just announced it is shifting some production of its Silverado trucks from Oshawa Ontario to the States. The remaining production in Canada presumably can be sold to Canada. Stellantis has also made a similar move. This is just the beginning. 

 👏 

[Lotus-eater]

If you personally don't produce all of the goods and services that you use, then you're outsourcing all of those jobs to other people. Until we reach a time where we can all "hunt in the morning, fish in the afternoon, rear cattle in the evening, philosophize after dinner," the division of labor and trade (I personally run a "trade deficit" with every business I trade with except my employer) is the only way to increase people's standard of living.

[mike carey]

The 25% tariff will result in price increases from 0% to 25% depending on how much of each car is foreign, or USMCA non-compliant. Don't be surprised if retailers charge the full 25% regardless, and also increase the price of 100% US-sourced cars by the same amount just because they can. 

[Ali Gator]

For the past month of April, every car dealer in my area has been running non-stop commercials all day / night for their "Pre-Tariff Sale!"  Who would think 'pre-tariff' would be an 'event' at a dealership ? Usually in April they're advertising to college grads who will need a car. Screw them! Now it's "Pre-Tariff Sale" at your local Toyota / Honda / Kia / Subaru / VW etc. dealer ! 

[+ Vegas_Millennial]

17 hours ago, mike carey said:

The 25% tariff will result in price increases from 0% to 25% depending on how much of each car is foreign, or USMCA non-compliant. Don't be surprised if retailers charge the full 25% regardless, and also increase the price of 100% US-sourced cars by the same amount just because they can. 

When I bought my car last year, it wasn't to buy in advance of tariffs; rather, it was to buy in advance of mandatory electrification.  I wanted a new gas powered V8 while there was still some in my price range.

[+ Charlie]

As I mentioned in another thread, as soon as Trump started talking about tariffs before he was inaugurated, I decided to buy a new car immediately, even though I didn't really need one yet. I understood what the tariffs would do to the prices of all cars, because even cars assembled in America by American manufacturers usually contain parts from some other country. I even bought a leftover unsold 2024 model on a dealer's lot, so there would be no question about whether or not it was pre-tariff-imposition.

A friend's elderly mother wrecked her old car a couple of weeks ago. She is trying to buy a cheap used car to replace it, but guess what?--now there is a shortage of available used cars, because owners are hesitating about trading them in for new cars that are suddenly more expensive than they expected, so of course the used cars are also more expensive than they normally would be.

[Luv2play]

20 hours ago, mike carey said:

The 25% tariff will result in price increases from 0% to 25% depending on how much of each car is foreign, or USMCA non-compliant. Don't be surprised if retailers charge the full 25% regardless, and also increase the price of 100% US-sourced cars by the same amount just because they can. 

That’s why these tariffs will be inflationary. The cost of living is going to rise over the next year if these tariffs persist. That of course remains to be seen. 

[Lotus-eater]

The timing is terrible. Just as the market had begun to normalize after the Covid-related supply disruptions caused crazy price increases for new and used vehicles, the tariffs and the uncertainty surrounding them is causing history to repeat itself.

Edited May 5 by Lotus-eater
Added graph

[+ Vegas_Millennial]

Even with the 21% increase in automobile prices above inflation from 2019 to 2024, adjusted for inflation prices are still about 25% cheaper than they were in 1984, and with better products, too.  The car I bought last year was the 2nd nicest in my family's history going back to the late 70s, yet adjusted for inflation was the cheapest. 

The real reason for the outrageous car prices is because Americans have traded up to nicer and bigger cars.  They want more and more entertainment and the latest technology and sensors.  No one is happy with a midsize or large sedan with no entertainment screens.  Had Americans been satisfied with sedans instead of SUVs, car affordability wouldn't be a problem.

Sources of information: 

https://www.in2013dollars.com/New-cars/price-inflation/1985

https://www.axios.com/2024/12/19/cars-prices-inflation-suvs

https://www.investopedia.com/financial-edge/0512/how-inflation-has-affected-the-price-of-cars.aspx

Edited May 5 by Vegas_Millennial
Added source of information

[SirBillybob]

I’ve been saving up for a car for several decades while cycling and walking for the most part, including on foot a few miles weekdaily to get to work for many years prior to retirement. The fund is now topped up to a few hundred thousand dollars. I can purchase pretty much whatever vehicle I choose but I won’t if prices escalate in addition to the penalty of liquidating taxable growth along with the challenge of relearning how to drive. Chances are that my eventual hearse ride duration will exceed the cumulative time that I’ve actually been in a vehicle over the past 10 years.

Edited May 5 by SirBillybob

[+ Vegas_Millennial]

1 hour ago, SirBillybob said:

I’ve been saving up for a car for several decades while cycling and walking for the most part, including on foot a few miles weekdaily to get to work for many years prior to retirement. The fund is now topped up to a few hundred thousand dollars. I can purchase pretty much whatever vehicle I choose but I won’t if prices escalate in addition to the penalty of liquidating taxable growth along with the challenge of relearning how to drive. Chances are that my eventual hearse ride duration will exceed the cumulative time that I’ve actually been in a vehicle over the past 10 years.

I think with a few hundred thousand dollars in your car fund, you should be able to find at least one car in your price range, even with extra taxes 😊 

If you meant that is your total net worth... Dave Ramsey's rule is to never buy a new car until one's net worth is at least $1M.  There's plenty of good used cars for under $10K which run just fine

[+ BenjaminNicholas]

I am coming off a lease this year and will likely buy it out, avoiding any tariff.  Love the car, love the brand, love the model.

And no...  It's not an American car.  I prefer German engineering.

 

[+ BenjaminNicholas]

1 hour ago, Vegas_Millennial said:

... Dave Ramsey's rule....

I stopped listening to his cult-like financial bullshit when he was caught with his hand in the cookie jar with timeshare exit companies.

[Lotus-eater]

6 hours ago, Vegas_Millennial said:

Even with the 21% increase in automobile prices above inflation from 2019 to 2024, adjusted for inflation prices are still about 25% cheaper than they were in 1984, and with better products, too.  The car I bought last year was the 2nd nicest in my family's history going back to the late 70s, yet adjusted for inflation was the cheapest. 

The real reason for the outrageous car prices is because Americans have traded up to nicer and bigger cars.  They want more and more entertainment and the latest technology and sensors.  No one is happy with a midsize or large sedan with no entertainment screens.  Had Americans been satisfied with sedans instead of SUVs, car affordability wouldn't be a problem.

Sources of information: 

https://www.in2013dollars.com/New-cars/price-inflation/1985

https://www.axios.com/2024/12/19/cars-prices-inflation-suvs

https://www.investopedia.com/financial-edge/0512/how-inflation-has-affected-the-price-of-cars.aspx

Yes, prices in inflation-adjusted terms declined over the past 40 years, but why should people suddenly be forced to pay 25% more for the second most expensive item that most people buy (or buy a less desirable vehicle) for no good reason? That 1980s American sedan optioned with "rich, Corinthian leather" was an overpriced piece of garbage, which is why Japanese and other manufacturers have taken most of the market share away from the Big 3. Tariffs allow domestic manufacturers to charge more and reduce quality.

 

Edited May 6 by Lotus-eater

[SirBillybob]

13 hours ago, Vegas_Millennial said:

[snip] … Dave Ramsey's rule is to never buy a new car until one's net worth is at least $1M.  There's plenty of good used cars for under $10K which run just fine

Without such violations of financial good sense, however valid a golden rule, there’d be no materialistic young adult over-leveraged strippers to whom to transfer dedicated car fund capital gains. In a way, then, I suppose I’m leasing and releasing without the hassles of maintenance, etc. 

Edited May 6 by SirBillybob