HOUSTON – Car buying has never been a cheap chore, but it’s about to become even more expensive.
President Donald Trump unveiled a tariff on all foreign vehicles that took effect at midnight on Thursday. Any vehicles being imported into the U.S. will face a 25% tariff.
Recommended Videos
Plus, there’s another 25% tariff coming down the road on all foreign auto parts.
This is jacking up the prices for foreign vehicles and American brands, too.
“A lot of American-made cars include foreign parts,” said RoShelle Salinas, the Executive Vice President of the Houston Automobile Dealers Association. “When we think of American made versus foreign made, you have to remember that Toyota, Nissan, Mercedes, they all have plants here in the United States. They’re producing vehicles here in our own country and there’s many parts that still come from out of country for all makes and models.”
What if there’s a way to avoid all of those extra tariffs?
Well, there is.
1. Buy Now
If you’re in the market for a new car, time is of the essence.
The vehicles sitting on car lots right now are not subject to tariffs. Those tariffs only apply to vehicles being imported after April 3.
“All of the inventory that dealers have right now in ground stock were produced well before the tariffs took effect and therefore are considered pre-tariff pricing,” said Patrick York, Chief Operating Officer of Gillman Automotice Group in the Houston area. “There’s plenty of inventory available, and that inventory is priced at pre-tariff pricing.”
York’s dealerships have roughly a two month supply of cars that won’t see tariff pricing.
So, there’s a window, but it’s closing fast.
How fast?
“We’re expecting to see the impact of post-tariff pricing, most likely with inventory that we receive in late May,” York said. “Starting in late May and into June, in the summer months, is when we expect to see that.”
2. Buy Used
Sometimes, you don’t get to decide when you buy a new car. Maybe it’s stolen, it breaks down or you’re in an accident.
If you’re in a position and need a car once tariff pricing is in effect, buying a used car may be the best route.
However, don’t expect to get away without hitting some higher prices, too.
“I think there will be a demand, a stronger demand for used cars,” York said. “People will naturally be inclined to think that they might get a better deal on a used car.”
“We predict that going back to the times of COVID, when used cars were available and you were getting, or the less available, the inventory was turning over quick and you are getting a really good trade-in value for your used cars,” added Salinas.
3. Wait It Out
If you can, wait out the rough weather and keep putting miles on your current ride.
It’s not guaranteed that prices will return, but it’s a better shot if you can’t dig deeper into the wallet right now.
However, there’s the question of how long these tariff’s will last and how long the impacts will linger.
That chapter of this story has yet to be written.
“It’s anyone’s guess at this point,” York said. “The manufacturers don’t know. The president and the administration have said that this is a long-term strategy. This is not a short-term negotiation with different nations to negotiate trade deals. However, we are operating right now with the information that we know for certain.”
