HEMPSTEAD, N.Y. — Consumers are hitting the gas on car purchases to head off expected price hikes from the Trump administration’s new tariffs, which threaten to reverse recent momentum in auto sales.
Major automakers, including Detroit-based General Motors and South Korea’s Hyundai, reported robust double-digit U.S. sales growth in the first quarter. Japanese brands Nissan, Toyota and Honda each reported more modest gains, while Jeep-maker Stellantis and Ford saw declines.
President Donald Trump announced last week that he’s slapping all foreign vehicles with a 25% tariff starting at 12:01 a.m. ET on Thursday, with imported auto parts facing the same levies no later than May 3. The president told NBC News last weekend that he “couldn’t care less” if automakers raise prices as a result. And on Wednesday afternoon, he’s set to open a vast new front in his ongoing trade war, with reciprocal tariffs aimed at equalizing trade barriers around the world, potentially on “all countries.”
News of Trump’s dizzying range of import taxes has piled up for months ahead of his auto tariffs rollout, spurring some shoppers to head to dealership lots before sticker prices rise.
Nadia Pierre-Toussaint swung by Millennium Honda in Hempstead, New York, on Tuesday after her mother advised her to buy sooner than later — and walked out with keys to a new Honda HR-V.
“It’s a good idea” to buy now, Pierre-Toussaint said. “Down the line it’s going to get more expensive.”
The White House estimates that around half of the 16 million cars sold to Americans in 2024 were imported, meaning its tariffs will apply to a wide breadth of vehicles. And even cars assembled in America are likely to face tariffs of some sort given the sourcing of parts from around the world.
Barring any carveouts or caveats from the administration, industry experts say there’s not a single vehicle whose parts and assembly are based entirely in the United States. That means every auto out there is potentially vulnerable to price increases under the new policies as they’ve been outlined so far.
“U.S.-made cars with all U.S. parts is a fictional tale,” Wedbush Securities analyst Dan Ives told NBC News this week.
Cox Automotive is forecasting an end this spring to the “Trump bump” in car buying that followed the November election. “Concern among consumers regarding the future of tariffs and the economy — a new economic uncertainty — is holding back the market,” Cox analysts wrote last week.
It’s a little bit unsettling to come in tomorrow and not know what’s going to happen.
Goldman Sachs estimates that Trump’s 25% auto tariffs could increase the cost of a new foreign-made car by as much as $15,000. Cars made in the U.S. with parts from overseas could see prices hiked by as much as $8,000, the bank said.
Some automakers have already indicated they’re prepared to raise prices on cars they sell to dealers as early as Thursday.
In a memo sent last week, Hyundai President and CEO Randy Parker warned dealers that “current vehicle pricing is not guaranteed and may be subject to change for units wholesaled after April 2, 2025.”
“We understand that you may be concerned about what this means for Hyundai and your dealership,” Parker said in a memo obtained by NBC News. “We are rapidly evaluating the situation and will communicate to you any necessary changes to our pricing strategy.”
Auto dealers have the ability to price vehicles on their lots however they like, though they’re often guided by what automakers charge them.
Ravel Mejia, the general manager of Millennium Honda, said he hadn’t seen any notice from Honda on price hikes as of Tuesday morning.
“But anything coming in after the second, if the tariffs kick in, we’re expecting [prices] will be a little bit higher,” he said. Mejia expects to sell whatever he currently has on his lot within a month and is bracing to pay more for the next shipment.
“It’s a little bit unsettling to come in tomorrow and not know what’s going to happen,” he said, adding that he doesn’t have many answers for customers who turn up with questions about tariff impacts.
Used car prices could take a hit as well, if prospective car buyers balk at higher costs for new cars and bid up the prices for cheaper pre-owned ones.
Floyd Wallace said he would’ve waited another month or so but decided to buy a used 2019 Honda Pilot at Mejia’s dealership now because of tariffs.
“After looking at it and seeing the price, I was like, this is right around the budget I had set for myself,” Wallace said Tuesday. “So I’m just going to do it and not wait,” he said, fearing he’d otherwise have to pay a few thousand dollars more.
“Before the storm actually drops, I want to get in and just get out,” he added.
Not everyone is worried. Michael Chen stepped into the showroom looking to trade in his leased Honda Civic for a Honda Prologue.
“I didn’t see any price hike right now in the car,” Chen said, “but, you know, we’ll wait and see.”
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