Trump’s Auto Tariff Plan: 4 Ways To Save on Car Purchases Now If It Becomes a Reality
Written by
John Schmoll
Edited by
Zuri Anderson
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Quickly after re-taking office, President Donald Trump introduced new tariffs that have the potential to impact the budgets of many Americans. A new proposed tariff on foreign cars is anticipated to take effect on April 2, 2025. After that date, Americans looking to buy a car may pay more for one.
Here are four ways to save on car purchases before proposed tariffs hit.
Select the Right Brand
Selecting the right car brand may save you thousands of dollars. Auto brands may not be equally hit by tariffs. As with any car purchase, buying one that fits within your budget and is reliable is essential.
“Brands that are considered affordable, already have domestic manufacturing for key models, have lower maintenance costs, and are known for their long lives are best positioned,” said Simeon Wallis, chartered financial analyst (CFA), Chief Investment Officer at Aprio, LLP.
Don’t just consider the purchase price of the car. Long-term repair costs should also be taken into consideration.
“As tariffs likely increase the price of cars because of the higher costs of original parts, those cars that enable a consumer to minimize repair costs and hold on to cars longer, while still affordable, are best positioned,” added Wallis.
Make Timely Purchases
Trump warned that tariffs on foreign cars would be coming before he was re-elected. There’s no telling when tariffs will impact pricing, but if you’re in the market, it may make sense to act before tariffs arrive.
“It’s too soon to tell because it will depend on how car manufacturers approach tariffs,” Wallis told GOBankingRates. “For those that can shift production and have robust domestic supply chains, they may hold off raising prices because they can gain market share relative to companies that are forced to raise prices sooner.”
Buy Used Now
Buying used is typically a good way to save when buying a car. Kelley Blue Book reported the average used car price was $25,565, and the average new car price was $49,740 in December 2024.
Buying a used, reliable car now can be a legitimate way to save versus delaying, which could add increased costs.
“If the costs of new cars increase, then buyers may shift to purchasing used cars; the increased demand for used cars should lift prices,” noted Wallis.
“Additionally, as used cars often require additional parts and services to ‘certify’ or prepare to be resold, the higher cost of parts from tariffs (and potentially higher labor costs from tariff-driven inflation and/or more restricted immigration) would ultimately flow into the higher costs to buy a used car.”
Plan Ahead
Planning ahead is a wise move whenever purchasing a car. However, the expense goes beyond the sticker price.
Interest rates on a potential loan, insurance rates and more also add to the overall cost. Rates to insure cars may increase as repair costs rise. Interest rates may similarly impact Americans.
“Auto tariffs can increase the costs of adjacencies, such as aftermarket and replacement parts, financing costs (higher car prices mean higher borrowing in a higher interest rate environment), and insurance since the cost of replacing and fixing cars is higher,” said Wallis.
Shopping around for lower rates on loans and insurance coverage can help reduce the burden on a budget for Americans who elect to buy now.
The Bottom Line
Wise action and knowledge is key to reduce the impact of potential auto tariffs.
“Even if a car is ‘made in America,’ the value of the content that is subject to tariffs on the car can vary by model,” added Wallis. Opting to buy before tariffs hit can be a good way to save money.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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