--- title: Your Next Car Could Cost 10% More Thanks to Trump's Tariffs description: Auto tariffs set to take effect April 3 could raise car prices by up to 10%, impacting consumers, repairs, and insurance costs. authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter. In his time at Money, Pete has covered everything from car buying to credit cards to the housing market. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 600 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Katherine Peach role: Associate Editor url: https://money.com/author/katherine-peach/ bio: Katherine Peach is an associate editor with a focus on news and email at Money. She didn’t always intend to write about money. She’s a classically trained pianist who dreamed of becoming an archaeologist. However, in 2007 Katherine began working in financial publishing as an editor for Agora Inc. (Apparently, unearthing ideas about improving your personal finances isn’t such a bad career alternative!) Katherine’s writing and editing work has been featured in Investing Daily, Clever, Investor Junkie, The Palm Beach Letter, Truth & Plenty, Independence Monthly, NICHE, AmericanStyle, AntiqueWeek, Millennial Money, Money Done Right, TheStreet, Sure Dividend and many others. Katherine holds a Bachelor of Arts in Ancient Studies with concentrations in Archaeology and Ancient Languages and a minor in Literature from the University of Maryland, Baltimore County. She is a member of Phi Beta Kappa. education: University of Maryland, Baltimore County at_money_since: 2025 articles: 14 covers: - Economy and Politics - Banking - Career Advice - Credit - Credit Cards - Debt - Education - Federal Reserve Rate Cuts - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes published: '2025-04-01T15:44:54.000Z' modified: '2025-04-15T22:36:42.000Z' section: Economy and Politics tags: - News word_count: 769 canonical: https://money.com/trump-tariffs-impact-car-prices/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Car covered in money with a map of the United States in the background](https://img.money.com/2025/03/News-Tariffs-Car-Cost.jpg) Auto tariffs set to go into effect this week could have sweeping impacts across much of the auto industry, resulting in higher prices for consumers. Some of the best-selling cars would be hit with 25% levies under President Donald Trump's latest plan for a universal tariff on all imported vehicles, assuming it actually goes into effect. Tariffs on some imported car parts that would affect the price of domestic vehicles are scheduled to take effect on May 3. That means car repair and auto insurance costs — two things that have already been hit hard by inflation — could be headed even higher. The tariffs could boost car prices by 5% to 10%, according to forecasts from analysts and industry experts. Arthur Laffer, an economist who was recognized by the president with a Presidential Medal of Freedom in 2019, wrote in an analysis obtained by the [Associated Press](https://apnews.com/article/trump-art-laffer-auto-tariff-warning-ba62f55af070e40e9d6eddf5d8433ad1) that tariffs could drive up the cost of cars by $4,711 — but it depends on whether the tariffs ultimately apply to car parts from Canada and Mexico. ## New or used, your car is an investment. Make sure it's protected! ### Get the coverage you need without breaking the bank. Click your state to get a free quote today. [View Rates](https://money.com/pr/gd49efb4d648?ap_referrer=%2Ftrump-tariffs-impact-car-prices%2F) Last year, 46% of all new cars sold were assembled outside the U.S., according to S&P Global. "Volvo, Mazda, Volkswagen and Hyundai Motor (including Genesis and Kia) imported at least 60% of their respective U.S. sales in 2024," [S&P Global](https://www.spglobal.com/automotive-insights/en/rapid-impact-analysis/us-import-tariffs-will-reset-automotive-value-chain) said in a forecast on tariff impacts. Car companies say they have been planning for tariffs, in some cases increasing U.S. inventories while also exploring supply chain and manufacturing changes to mitigate exposure. But there's only so much they can do in the near term. Even brands with extensive U.S. manufacturing are vulnerable. Toyota and Honda import many of their wildly popular RAV4s and CR-Vs, respectively, from Canada. Toyota makes its Tacoma in Mexico, and Chevrolet's Trax is assembled in Korea, among many other examples. "Consumers likely have a narrow window to buy new or used vehicles before prices increase by 10% or more," Cox Automotive's chief economist, Jonathan Smoke, said in a [report](https://www.coxautoinc.com/market-insights/auto-industry-braces-for-impact-25-tariffs-on-imported-vehicles-set-to-disrupt-market/). ## Auto tariffs: How much will car prices rise? The president's tariff plans could still shift or evolve. It's [happened before](https://apnews.com/article/tariffs-trump-economy-mexico-canada-bfed103a11a2a71d8353350f94c78814). Trump says he's looking for concessions of "[great value](https://www.nbcnews.com/politics/donald-trump/trump-says-couldnt-care-less-automakers-raise-prices-tariffs-rcna198731)" from other countries in order for him to consider changing his mind on tariffs, which he hopes will revitalize the U.S. auto industry. On Saturday, the president denied a report that he had told car makers not to raise prices, telling NBC it's fine if foreign car companies raise prices because consumers won't buy their cars. Instead, he predicts they'll shop American. "The automakers are going to make a lot of money — the American automakers," Trump then told reporters on Air Force One Sunday, adding that international automakers could make money too if they build cars here. "Outside of the United States, that's going to be up to them. I don't care too much about that." However, automakers would likely also increase prices on vehicles assembled in America if their competitors' prices for foreign cars spike due to tariffs costs. "The tighter supply and higher prices we expect will be reminiscent of 2021," Smoke said. Back then, COVID-era manufacturing disruptions led to huge drop in dealers' inventories and vehicle affordability plummeted. Plus, American cars contain parts from all over. "The average domestic content is conservatively estimated at only 50% and is likely closer to 40% American-made components," a White House [fact sheet](https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-president-donald-j-trump-adjusts-imports-of-automobiles-and-automobile-parts-into-the-united-states/). According to Edmunds, tariffs could make it harder to find discounts on new cars. Automakers can reduce or eliminate financing incentives and cashback rebate offers to increase prices without necessarily increasing their sticker prices. The potential impact of auto tariffs is still difficult to assess due to the political unknowns about what the tariffs will look like and how long they'll last. For example, the administration is still determining how tariffs could eventually apply to car parts from Canada and Mexico that are used in cars assembled in the U.S. Car prices aren't the only thing that will be touched by auto tariffs, Smoke emphasized in the Cox report. "With 25% increases in the cost of parts, inflation would surge in maintenance and repair and [insurance](https://money.com/best-auto-insurance/), which vehicle owners are already struggling to handle." Automakers are lobbying for exemptions or delays to the tariffs, and some are trying to curry favor with the president by pledging to do business in the U.S. Notably, Hyundai announced a $21 billion investment to increase manufacturing in the U.S. from 2025 to 2028. ## One of the best ways to pay less for Car Insurance is by comparing rates ### Click below to begin finding your rate today. [View Rates](https://money.com/pr/i86244fe9d5c?ap_referrer=%2Ftrump-tariffs-impact-car-prices%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/trump-tariffs-impact-car-prices/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Inflation", "item": "https://money.com/inflation/" }, { "@type": "ListItem", "position": 4, "name": "Your Next Car Could Cost 10% More Thanks to Trump's Tariffs" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/trump-tariffs-impact-car-prices/#webpage", "url": "https://money.com/trump-tariffs-impact-car-prices/", "name": "Your Next Car Could Cost 10% More Thanks to Trump's Tariffs", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2025-04-01T15:44:54.000Z", "mainEntity": { "@id": "https://money.com/trump-tariffs-impact-car-prices/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/trump-tariffs-impact-car-prices/#breadcrumb" }, "dateModified": "2025-04-15T22:36:42.000Z" }, { "@type": "NewsArticle", "headline": "Your Next Car Could Cost 10% More Thanks to Trump's Tariffs", "articleSection": "Economy and Politics", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2025/03/News-Tariffs-Car-Cost.jpg", "width": 2880, "height": 1920, "caption": "News-Tariffs-Car-Cost" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter. 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