Car Prices Are About to Skyrocket—Here’s What You Need to Know
If you’ve been eyeing a new ride, brace yourself. The cost of buying a car is about to hit the gas on price hikes—and there’s no slowing down.
Come April 3rd, a 25% tariff will hit all imported cars entering the U.S., and soon after, that same hefty tax will apply to most foreign-made car parts. Translation? Buying a car is about to get a whole lot more expensive.
Why Is This Happening?
In 2024, the U.S. imported $246 billion worth of passenger vehicles, mostly from Mexico, Canada, and East Asia. German-made cars also make up a big slice of the market, with Germany ranking as the fifth-largest auto exporter to the U.S.
President Donald Trump is behind this move, pushing for automakers to shift production back to the U.S. The idea sounds simple—build cars here, avoid the tariffs—but industry experts say that’s wishful thinking. Manufacturing in the U.S. comes with steep costs, and Trump has already slapped 25% tariffs on steel and aluminum—materials crucial for building cars. If copper joins that list, prices will climb even higher.
How Much More Will We Pay?
According to Goldman Sachs, the tariffs alone could drive up car prices by $5,000 to $15,000 per vehicle, depending on the make and model. That doesn’t even account for the higher costs of materials.
For decades, North America has been a borderless powerhouse for car production, thanks to free trade agreements that kept costs low. Mexico was the top source of U.S. car imports last year, but now, with these tariffs looming, nearly half of all vehicles sold in America could be affected.
Who Gets a Pass?
Brands like Tesla and Honda might dodge the worst of it since they assemble most of their U.S.-sold models domestically. Also (for now), cars that comply with the United States-Mexico-Canada Agreement (USMCA) can still enter the U.S. duty-free—at least until Customs and Border Protection figures out how to enforce tariffs on foreign-made parts.
What’s the Move?
If you’re looking for a new whip, timing is everything. Once April 3rd hits, those sticker prices are going up—and they may not come down anytime soon.
