US car buyers flock to dealerships to dodge tariff-driven price increases

US car buyers flock to dealerships to dodge tariff-driven price increases

Buyers Accelerate Purchases Over Tariff Concerns

When Matthew Mitchell heard that U.S. President Donald Trump was serious about implementing 25% tariffs on Mexico and Canada, he decided to act quickly. He and his wife rushed to purchase a 2019 Toyota Camry in early March, hoping to avoid any tariff-related price increases.

Mitchell is one of many buyers who expedited their car shopping due to concerns that new tariffs would lead to higher prices at dealerships.

Current Market Conditions

At present, the tariffs have not yet affected dealership inventories, which typically have a three-month supply of vehicles. Many U.S. automakers have already received two delays on the tariffs since they were first announced in early February.

Despite this, uncertainty has led some consumers to take action. Between February 16 and 22, searches on car-shopping website Cars.com increased by 9% compared to the previous week, according to analyst David Greene.

Consumer Reactions to Tariff Announcements

“When the tariff announcement first came in early February, it didn’t immediately impact car shoppers,” Greene said. “However, when discussions expanded to include all imports and auto tariffs were postponed to April, searches on Cars.com spiked.”

A Reuters poll of 74 economists recently indicated that the unpredictability of U.S. tariffs is creating economic risks for Mexico, Canada, and the U.S. Expectations for both inflation and a potential recession are rising, leading consumers to adopt a more cautious approach to spending.

Buyers in the U.S. and Canada React

In Calgary, Canada, Darby Madalena accelerated her plan to buy a 2025 Subaru Forester by a full year. “It didn’t make sense to wait anymore,” she explained.

Similarly, Philip Hodge finalized his purchase of a new Mustang Mach-E, knowing that the Ford model is imported from Mexico. “I just wanted to get it done now and not worry about it,” he said.

Dealership Response and Inventory Supply

Car dealers report that they have sufficient inventory to handle short-term disruptions. In February, dealers had an average of 96 days’ worth of supply, a 26% increase from the beginning of the year, according to Cox Automotive.

Some dealers see the uncertainty as beneficial, as it drives more customers into showrooms. Jim Seavitt, a Ford dealer in Dearborn, Michigan, noted that sales were particularly strong the week of March 3, though he attributed this more to promotional deals than to tariff concerns.

Nevertheless, some dealerships have leveraged the tariff threat in marketing. A Subaru dealership in Connecticut displayed a banner on its website warning: “Final clearance pricing on remaining 2024s – save now before tariffs drive prices up.”

Rising Car Prices Add to Concerns

Since the pandemic, car prices have become increasingly unaffordable. In January, the average vehicle sales price reached $48,641, a 30% increase from $37,348 in January 2019, according to Cox Automotive.

Last year, some buyers pushed up their purchases following Trump’s election, anticipating that he would implement the tariff policies he proposed during his campaign.

The Uncertain Road Ahead

Saud Ansari, a resident of Cleveland, Ohio, decided in early November that it was time to act. He finalized the purchase of a 2025 Toyota Sienna near Columbus, Ohio, just before the presidential inauguration.

Although Trump postponed the original tariffs until March and later granted another one-month delay for vehicles complying with the United States-Mexico-Canada Agreement (USMCA), the looming possibility of tariffs and rising interest rates influenced Ansari’s decision.

“I’m glad to have it out of the way,” he said. “The uncertainty ahead was a big factor.”

“US car buyers flock to dealerships to dodge tariff-driven price increases” “US car buyers flock to dealerships to dodge tariff-driven price increases” “US car buyers flock to dealerships to dodge tariff-driven price increases” “US car buyers flock to dealerships to dodge tariff-driven price increases” “US car buyers flock to dealerships to dodge tariff-driven price increases”