‘Now we have tariff panic’: Car buyers across America have been left scrambling to buy before prices go up by the thousands — why purchasing a car in 2025 just keeps getting harder

What do tariffs mean for car prices — and dealerships?

Industry experts expect the tariffs to send prices climbing — quickly. The 25% tariffs currently only apply to imported vehicles, but they’re already rippling through the entire market. Trump has since floated the idea of giving some temporary exceptions to allow auto companies more time to set up their manufacturing arms within the U.S. but he didn’t specify which temporary exceptions he might put in place.

However, Erin Keating, executive analyst with Cox Automotive, told ABC7 she anticipates vehicles that are impacted by the tariffs will likely see a 15% to 20% increase in price. Even those that aren’t directly impacted may still see increases of 5% off the bat simply from rising demand. Keating adds that increased demand for used cars will likely drive prices up on the preowned market as well.

That means both dealers and consumers will be navigating a tougher automotive landscape. And it’s not just complete vehicles: by May 3, the U.S. is expected to impose a second round of tariffs — this time, targeting foreign-made auto parts.

“If that goes through, that’s going to have a much greater impact on us just because every vehicle, regardless of where they’re manufactured, has parts from all over the place,” Tom Giordano, president of Maplecrest Ford, told CBS.

Giordano said dealerships will have little choice but to pass the added costs along to buyers. “So I think the prices are going to go up,” he said. “And that’s unfortunate because the prices are already elevated since COVID.”

The tariffs will likely force dealerships to rethink business strategies. Some dealers may focus on moving existing inventory quickly before costs increase further. Some may consider renegotiating with suppliers to prioritize vehicles built in North America, which may be less affected by the new tariffs.

Highlighting where a car is assembled — especially if it avoids tariff costs — could also become a bigger part of how dealerships market their inventory.

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What should car buyers expect?

Buyers hoping to dodge higher prices may need to act fast. Some experts warn that sticker prices could jump by thousands, leading to significantly higher monthly payments as interest rates remain elevated.

“Especially mixed with the high interest rates that we have right now, a $10,000 to $20,000 jump is going to raise your payment $400 to $500 a month,” DeMattio told CBS News.

To avoid the steepest price hikes, look for models built in the U.S. or in countries not impacted by the tariffs. Dealership websites and manufacturer VIN decoders can help confirm a car’s country of origin. As the market shifts, don’t hesitate to shop around — some dealers may still have pre-tariff inventory they’re eager to move.

It’s also worth exploring certified pre-owned options. Though used car prices are expected to climb, the increases are likely to be more modest. Purchasing cars already in the U.S. may help you avoid the largest price hikes.

Finally, shop around to find lower interest rates on car financing. Local credit unions often offer more favorable rates. In the future, dealerships may be willing to work out better finance deals once prices increase and fewer buyers are in the market for a new vehicle.

If you’re not quite ready to buy, look to save more. A larger down payment can help limit your interest payments, saving you money in the long term.

For now, the sense of urgency is clear. Between global supply chain issues, high interest rates and now tariffs, buying a car in 2025 may require more planning — and a bit more luck — than ever before.