Why Car Buyers Should Hurry Before Tariff Hikes Hit

If the high cost of car ownership has been keeping you from buying, now’s the time to reconsider. Car prices are on the verge of another surge, and CNN’s latest report paints a sobering picture of what’s ahead for buyers due to recent tariff hikes.

A fresh wave of tariffs on steel and aluminum has already taken effect, and with a temporary exemption on auto imports from Mexico and Canada set to expire on April 2nd, the cost of vehicles and parts may soon reflect the added costs.

This may be your final chance to lock in a new car at a lower price.

Tariff hikes set to drive vehicle cost even higher

In discussion with CNN, Ivan Drury, director of insights at Edmunds, stated, “There is no way you’re going to see a better discount if you wait three months. That’s guaranteed.”

With tariffs poised to take effect, industry analysts predict car prices could jump anywhere from $4,000 to $12,500, depending on the vehicle’s make, engine type, and country of origin.

And while some buyers may be hoping for end-of-year deals or manufacturer incentives to soften the blow, experts caution that automakers will likely pass these added costs directly to consumers.

This looming price surge doesn’t just affect new car buyers—it could send ripples through the entire automotive market. Higher new car prices often push more consumers toward used vehicles, driving up demand and inflating prices in that segment as well.

Additionally, increased costs for imported parts could make repairs and maintenance more expensive, meaning even those who choose to hold onto their current vehicles may feel the impact.

What car brands will be affected?

The ripple effect of these tariff hikes won’t stop at American brands like Ford and GM. Foreign automakers with a strong force in North America, like Honda, Toyota and BMW, are also preparing for price increases.

In the coming months, no matter the badge on the hood, every automaker will be making price adjustments.

Will car insurance increase?

Another factor weighing on buyers’ minds is insurance. According to an analysis by Insurify, the national average cost of full-coverage car insurance could climb by 8% by the end of the year if 25% tariffs on imports from Canada and Mexico take effect on April 2. That would push the average premium from $2,313 to $2,502.

This correlation stems from the often-overlooked fact that insurance premiums are partially based on repair costs. As the price of car parts rises, insurers may adjust rates to compensate, creating a direct impact on what drivers pay for coverage.

How to prepare for the tariff hikes

Timing is everything in the automotive world, and now, that’s truer than ever. Buyers may have only a short window before these increases hit the showroom floor. If you’re hoping to avoid the full impact of rising costs, acting sooner rather than later could make all the difference.

Here are smart strategies to stay ahead of the rising prices:

• Consider Leasing – If you’re hesitant to commit to a high sticker price, leasing could be a smart alternative. Monthly lease payments are often lower than loan payments.
• Look at Previous Model Years – Dealerships often offer discounts on last year’s models to clear space for new inventory. These vehicles still come with modern features and warranties but may be priced lower than incoming models that will reflect the added costs.
• Act Quickly on Dealer Incentives – Automakers and dealerships may be running promotions to move inventory before prices rise. Whether it’s cashback offers, low-interest financing, or trade-in bonuses, taking advantage of these incentives now could mean locking in a lower cost before tariffs inflate prices.
• Expand Your Search – If local dealerships aren’t offering competitive pricing, consider widening your search radius. Some regions may have better deals or lower demand, allowing you to find a more affordable option.

Act fast

The auto market has undergone some major setbacks since the pandemic, and the tariff hikes are just another challenge adding pressure to the landscape. With costs expected to climb even higher, buyers have a limited window to secure a vehicle before increases take effect. Acting now could save you thousands.

What are your thoughts on the tariff hikes and its impact on the automotive industry? Share your insights in the comments, and don’t forget to follow our blog for more updates and industry news!