By Christopher Otts
When will tariffs start to affect new car buyers?
Within months. Imported cars, SUVs and trucks already in the country, or arriving before April 2, aren't subject to President Trump's 25% tariffs. Most automakers also keep healthy stockpiles in inventory, usually enough to last about two to three months. Some brands such as Honda and Toyota keep tighter supplies.
"We will work through the inventory on the ground, and it's probably about two months before you start having tariffed inventory at dealers," said Stephanie Brinley, an automotive analyst at S&P Global Mobility.
If sales pick up quickly with consumers trying to get ahead of the tariffs, stock could deplete faster. Even before Trump's order, U.S. auto sales were on pace to surge 13% in March, due mostly to people trying to pull ahead purchases before import duties become effective, according to research firm J.D. Power.
Will car prices rise? How much could they go up?
Very probably. Car prices are almost certain to rise if the tariffs remain in place. Automakers and dealers can absorb some of the added costs but not all, and they are likely to pass some increases along to the consumer.
On average, vehicle prices could rise 11% to 12% to offset tariff duties, Morgan Stanley analysts wrote in a note released Thursday.
What other effects could tariffs have?
They could mean fewer models are sold. JP Garvey, a car dealer in New York, said automakers have stockpiled vehicles at ports, but ultimately a hefty 25% duty could limit choice.
Rather than move production to the U.S. or pay the tariffs, companies could simply cut affected models from their lineups. "I could see many brands choosing not to bring their import vehicles in," Garvey said.
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(END) Dow Jones Newswires
March 27, 2025 11:22 ET (15:22 GMT)
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