Trump Slaps 25% Tariffs On Autos: What It Means For Your Next Car Purchase

Car prices surged during and after the COVID-19 pandemic. Experts are now warning consumers to prepare for additional price hikes due to President Donald Trump's new 25% tariff on imported vehicles and certain auto parts.

What To Know: President Trump announced the tariffs on Tuesday evening, saying they will “charge countries for doing business in our country and taking our jobs, taking our wealth,” and claiming they will “spur growth like you haven't seen before.”

Experts predict these tariffs will lead to tighter supply and higher prices by mid-April.

“You’re going to see price increases,” Ivan Drury, director of insights at automotive research site Edmunds, told USA Today. “It’s such a shotgun approach. Virtually nothing goes unscathed.”

Price increases are expected across the board, affecting new and used cars, maintenance costs and even insurance premiums as the cost of replacement parts will also go up.

New vehicle prices have gone up approximately 25% since early 2020, according to the Kelley Blue Book, with the average price for a new car just above $48,000 as of February 2025.

According to estimates from the Anderson Economic Group, electric vehicle prices could rise by as much as $12,200 once the tariffs are in effect. Tesla, Inc. TSLA EVs could see similar price hikes as the automaker relies heavily on imported batteries and electronics.

Wedbush analyst Dan Ives remained hopeful in a note written Wednesday that the auto tariffs are a negotiation tool and will be revised in the coming weeks.

However, Ives said the tariffs in their current form “would be a hurricane-like headwind to foreign (and many US) automakers” and could raise the average car price by $5,000 to $10,000, depending on the make and model.

Why It Matters: While the tariffs might encourage U.S. manufacturing investment in the long term, consumers will face immediate price challenges. Shares of the Big Three U.S. automakers’ stocks are also suffering, with Ford Motor Co. F, Stellantis N.V. STLA and General Motors Co. GM all down sharply on Trump's tariff plans.

Most experts agree that consumers who were considering purchasing a vehicle may now want to move sooner than later as prices are expected to rise.

"If you were thinking about buying in the next couple of years, it might not be a bad idea to make that purchase now if you can afford it," Monica Dwyer, a certified financial planner, told CNBC.

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