Get ready to prepare for more expensive cars and trucks

Buckle up, car buyers.

Whatever comes next for US trade policy, experts say that prices will probably increase. According to economists, it is less likely that car -free offers will map or worry about deleting the inventory that may be worth more in a few weeks, and the vehicles issued today will be more valuable if the United States start to impose tariffs.

The Americans are looking for affordable automobiles, and the current inventory of the dealers could be most cost -effective for some time, which makes it very much in demand. Buyers can expect advertising campaigns to be withdrawn. Dealers probably have to pay more to replace the vehicles they have sold.

While a rapidly moving trade environment means that the exact effects are difficult to calculate, economists are, the level on the automotive prices is set-and remain increased for some time, according to economists.

“Nobody is sure what this currently means for the market,” said Charlie Chesbrough, Senior Economist from Cox Automotive. “But I think we can expect prices to start.”

Monthly payments are already a hurdle

According to Cox, around 16 million new cars were sold in the USA last year. New cars cost around 48,000 US dollars in February, which increased about 1% of a previous year.

According to Chesbrough, who said that the average monthly payment for new cars has increased to around 780 US dollars in the past five years, the average monthly payment for new cars has already increased by 26%, while the average monthly bill for used cars rose by 30% to around 560 US dollars, which, according to Chesbrough, rose by 26%.

“This makes these monthly payments unaffordable for many,” said Chesbrough last week in a webinar. “This is the biggest headwind that the vehicle market is currently exposed.” According to Apollo, a wealth management company, the average age of the cars on the road has reached 14 years due to rising prices on the road.

The Trump administration’s trade policy is expected to increase prices. Tariffs of 25% for aluminum and steel should begin tomorrow, and President Trump spoke up to 50% when the materials come from Canada. He has postponed the implementation of 25% tariffs for other goods from Mexico and Canada, which are currently to come into force on April 2.

In 2024, the United States imported more than 8 million cars and light trucks, according to the data of the international trading administration, with more than half of Mexico or Canada. America produced around 1.75 million cars in 2023, and the last year data was available from the international organization of motor vehicle manufacturers.

And cars that are finished in the states can rely on parts from Canada and Mexico, which have recently been protected by a trade agreement from tariffs and fees. Depending on the model, the compilation of a car in North America could cost 3,500 to 12,200 US dollars if, according to the Anderson Economic Group, a research and advisory company, tariffs for goods from Canada and Mexico and these countries are distributed.

Problem exposures can be limited for car manufacturers

Dealers and manufacturers have accumulated in the USA to be ahead of the tariffs, said Chesbrough. However, it is almost impossible to avoid additional costs, even if domestic manufacturers receive American companies.

An example: Ford (F) gets most of his steel from the United States, but its suppliers have international sources, said CEO James Farley at a conference last month, which means that Ford is not immune to price increases – which is driven by tariffs itself or the possibility.

A meeting could be brought back to the United States, but the transition could take three years, the analysts of the Bank of America said in a note in the early this month. In most cases, however, the domestic inland would remain more expensive than importing, the note says.

After manufacturers and suppliers have made adjustments, the US car prices will increase by about 6%, according to estimates from the budget laboratory in Yale, which were taken into account in retaliation duties from Canada, Mexico and China.

“Let’s really be honest,” said Farley at the conference, according to a copy of alphasense. “In the long term, a 25% tariff would dig a hole in the US industry that we have never seen before.”