Tariffs are likely to push auto prices higher. Should you buy a car soon?
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Buying a car is a significant financial decision, not an impulse purchase. Recently, many of our members have expressed concerns about rising vehicle costs, recalling similar trends during the COVID-19 pandemic. At Energy Credit Union, we always encourage thoughtful decision-making, especially for major purchases. However, if you're considering buying a new or used car in the near future, it's important to factor in the potential impact of upcoming tariffs and how they may drive up prices.
Experts warn that now is the best time to buy a car before impending tariff-related price increases take effect. President Trump’s 25% tariffs on steel and aluminum are already in place, and the temporary exemption on auto imports from Mexico and Canada expires on April 2, driving up vehicle and parts costs.
Industry analysts predict price increases of $4,000 to $12,500 per vehicle, affecting both U.S. and foreign automakers like Ford, GM, Toyota, and BMW. The tariffs could also impact availability, with North American production potentially dropping by 20,000 units per day. Incentives such as rebates and cash-back offers may disappear overnight.
Consumers are already feeling the strain, 33% of prospective buyers now expect auto loan rejections, the highest rate recorded by the New York Federal Reserve. Used car prices are also expected to rise as lessees hold onto their vehicles to avoid paying inflated new car prices, leading to tighter inventories.
Experts recommend researching vehicle origins using the American Automobile Labeling Act report to understand potential tariff impacts. However, we at Energy Credit Union caution our members against making compromises that don’t fit one’s needs just to avoid tariffs, as it may not lead to actual savings.
With manufacturers and dealerships adjusting pricing strategies to maintain margins, members should act soon before incentives disappear and costs rise across the board.
New Auto / Motorcycle - Zero Down (LTV 100% KBB / NADA)
Effective: November 12, 2024
Used Auto / Motorcycle (LTV 90% KBB / NADA)
Effective: November 12, 2024
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