John Connelly has been noticing a theme among some customers who walk into his Acura dealership: They’re worried about tariffs.
President Donald Trump’s latest tariffs, which will take effect on Wednesday, include a 25% duty on imports of passenger vehicles and car parts. Some consumers are responding by buying a new car now instead of paying a higher price after the tariffs hit, according to analysts and a dealer BI spoke with.
Some customers who have stopped by Connelly’s Columbus, Ohio-area dealership over the last few days have wanted to know how much the tariff — along with a local sales tax increase this week — could raise the price of a new car, Connelly said.
“There’s definitely been questions raised,” with many customers asking “what we think is going to happen with the tariffs,” Connelly, who is also a former chairman of the American International Automobile Dealers Association, told Business Insider.
“When you’re buying a $60,000 car, that really adds up,” he said.
The auto tariffs are part of a package of duties that Trump is expected to implement on Wednesday, which the president has dubbed “Liberation Day.” Other imports that could face new tariffs include goods from Canada and Mexico, as well as agricultural products.
Many of the tariffs or potential tariffs that Trump and his administration have discussed threaten relatively low-cost items, such as bottles of tequila or fresh salmon.
But tariffs could add thousands of dollars to the price of cars, which are a big investment for many middle-income households.
“Many folks who were thinking of buying a vehicle are now rushing to buy before the end of the month,” Charlie Chesbrough, senior economist at Cox Automotive, said in comments on Friday.
Part of the worry is that higher prices on dealers’ lots will follow the tariffs.
Analysts at JPMorgan estimated in late March that the 25% tariff could add nearly 9% to the average retail price of a new car if companies fully passed the tariff to buyers.
The tariff might not just affect the prices of new cars, Connelly, the car dealer in Columbus, said. Auto manufacturers might decide that cars and parts made outside the US could be more profitable if sold in other countries due to the tariffs, he said.
He also expects prices for used cars to increase under the tariff as inventories become limited.
Connelly said that many car buyers don’t have as much cash to burn on big purchases as they did during and immediately after the pandemic. Back then, many consumers had savings to burn thanks to government stimulus checks and fewer expenditures on things like air travel.
“A lot of people had money in their pockets from the pandemic,” he said. “That money has been drying up, so there’s less ability to rebound.”
Do you have a story about how tariffs or the threat of tariffs are affecting your business or life? Reach out to this reporter at [email protected]
The post Car buyers are trying to avoid Trump’s tariffs by rushing to dealerships before prices go up appeared first on Business Insider.
