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Car Buyers Face Looming Price Hikes as Tariff Window Closes

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.

Rates

• (1) Annual Percentage Rate and amount is based on current credit rating. Additional 0.25% discount may be available for new electric/hybrid vehicles.
• New Auto or Motorcycle loans requires 0% down payment or financing up to 100% of NADA or KBB book value. Auto or Motorcycle with 5,000 miles or less are considered New. Loans are subject to credit approval.

• (1) Annual Percentage Rate and amount is based on current credit rating.
• Used Auto or Motorcycle loans require 10% down payment or financing up to 90% of NADA or KBB book value. Auto or Motorcycle with more than 5,000 miles are considered Used. Loans are subject to credit approval.