Americans were already concerned about inflation when President Donald Trump announced 25% tariffs on imported automobiles and car parts on Wednesday. An analysis by economist Arthur Laffer shows the tariffs could add $4,711 to the cost of a vehicle. But industry experts say consumers should not worry prematurely.
“You don’t need to panic,” Brian Moody, executive editor at Autotrader, tells TIME, pointing to the constantly evolving tariff policies enacted by the Trump Administration. “If someone’s already in the market for a new car, and they were planning to do that this year, I think you can go ahead and do that.”
Read More: Trump Puts 25% Tariff on Imported Cars
The new trade policy could exacerbate existing problems in the auto industry, which is already suffering from a shortage of used cars. The price of used cars skyrocketed during the COVID-19 pandemic, spiking at the end of 2021 before dipping—though used car prices remain substantially higher than pre-pandemic rates, according to the Manheim Used Vehicle Index.
“Automakers decided to produce fewer new cars, thinking there would be lower demand,” says Moody. “New cars that weren’t built at that time are now used cars that are not in the marketplace today.” The limited supply of used cars “was almost always going to mean high prices for used cars 2025, into 2026, no matter who was president, no matter what executive orders were signed,” he adds.
Earlier this year, Trump announced 25% tariffs on steel, one of the main materials used in car manufacturing, and aluminum. As the largest steel importer worldwide the tariffs are already impacting the auto manufacturing industry.
The White House said companies that import auto parts as part of the United States-Mexico-Canada Agreement (USMCA) would receive some exemptions until Commerce Secretary Howard Lutnick created a process to impose a tax on their foreign-made items.
Here are some tips consumers can use to save money on cars.
Start researching now
While experts say they will have to wait for Lutnick’s order to decipher how automakers will be affected, those interested in purchasing a new car should start looking into the model or brand they want now.
“Maybe just do some educating on things like, ‘Well, what cars are built in the U.S.? What does inventory supply look like at my local dealer?,’” says Moody. “I would call a local dealer or two and say, ‘Hey, I’m interested in buying a XYZ car. Do you have a lot of those? Are those hard to get?’” Establishing a relationship with the dealership ahead of time may be useful in negotiating a deal.
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Shoppers should also consider the popularity of a vehicle before purchasing. “High-demand cars will always be expensive. Low-demand cars will be the ones to get a deal on,” he says.” For 2024, the most-sought after vehicles in the U.S. include the Ford F-Series, Chevrolet Silverado, Toyota RAV4, Tesla Model Y and Honda CR-V, according to a report by the Kelly Blue Book. Asking for alternatives to these popular models might prove effective at conserving money in the long run.
“Look for the opportunities of low sales or slow sales, and be flexible on things like color features,” adds Moody. White is the most popular car color in the U.S., with black, silver, and gray also leading the list.
Know which cars are American-made
More than 50% of auto shoppers want to purchase an American-made car, which may prove beneficial given the newly-announced tariffs.
Tesla, which designs, builds and services their products in the U.S., is least likely to be affected by tariffs. Their Model Y topped the list for the “most American car” based on a 2024 list Cars.com list that ranks cars based on their assembly location, parts content, engine origin, transmission origin and U.S. manufacturing workforce. The company also had two other cars—the Model S and Model X, in the top ten.
Honda also had three cars at the top of the list, with second place going to the Passport, while the Odyssey and Ridgeline also made the cut. The Volkswagen ID.4, Toyota Camry, Jeep Gladiator, and Lexus TX were also featured.
That’s not to say potential car buyers should automatically assume these models won’t be affected by tariffs.
“[Carmakers] are going to amortize it across all their vehicles so that it’s less of an impact to the consumer. So if you incur a 10% tariff on one car, a 5% on another and a 20% on another, they’re going to do the math and even that out so that each car in their line gets a same dollar amount price increase,” says Moody. Automakers also do not make every part for their cars. Instead, many rely on foreign suppliers for engines or transmissions.
Additionally, some companies, like Ford, do not have any of the vehicles in the top 10 but make more than 70% of the automobiles sold in the U.S. within the country’s borders. General Motors (GM) has the most cars in the top 100, even though it is an import brand. On Thursday, their stocks fell more than 6%.
“Tesla and Ford appear to be the most shielded given location of vehicle assembly facilities although Ford does face incremental exposure on imported engines,” Deutsche Bank analysts told CNBC. “GM has the most exposure to Mexico.”
Leverage what you can
Potential car buyers should look into the many discounts a dealer might offer for recently graduated students, military servicemen, and more.
Typically, some experts say the best time to purchase a car is the end of the year. But Moody says that consumers should also look into the chance to buy cars at the end of the month, or the fiscal quarter.
“Within those marked time periods, there are often incentives from either the dealer to the salesperson, or from the automaker…to the customer,” he says. “They might want to discount the car a little bit just to get it into your hand so that they can mark one more sale down. That’s not likely to undo too much … but it’s still something.”
