Americans Accelerate Car Purchases

Newsweek

8 hours ago

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
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Americans have pulled forward purchases and increased their budgets for new cars in anticipation of the impacts of President Donald Trump's tariffs, according to a new report from LendingTree.
A survey of 2,000 consumers by the research firm and online lending marketplace found that 72 percent of car buyers have shifted their purchasing timelines this year, with 81 percent of those who have purchased a new car doing so earlier than initially planned as a result of the new duties. In addition, 50 percent report raising their car-buying budget specifically due to tariffs.
Why It Matters
While President Trump has scaled back some elements of his 25 percent tariffs on automobiles—which target foreign-sourced cars and certain car parts—these are expected to add considerable costs for those planning on purchases this year.
The phenomenon of front-loading—shoppers buying more of a product earlier than they otherwise would have—has also emerged as a secondary effect of president Trump's tariff plans. Rushes to buy goods before these are hit with duties have been recorded across sectors, warping data on retail sales and revealing the anxieties Americans hold about the trade measures.
What To Know
According to LendingTree's survey, conducted in early May, 37 percent of Americans who plan on purchasing a car this year will do so sooner than they otherwise would have, while 36 percent say they will hold off until later.
In addition, 77 percent said they believe tariffs will drive up car ownership costs in 2025, with anticipated increases in vehicle costs (74 percent) as well as repairs and parts (69 percent). Of this group, 40 percent said they plan to drive less this year as a result.
Ford trucks are seen at a car dealership in Montebello, California on May 5, 2025.
Ford trucks are seen at a car dealership in Montebello, California on May 5, 2025.
Frederic J. Brown/AFP via Getty Images
According to research by global consulting firm AlixPartners, cited by Bloomberg, Trump's tariffs will result in an average cost increase of $1,760 per car, as auto companies are expected to pass along 80 percent of the tariff-related costs to their consumers.
LendingTree also found that, of those who plan to purchase a car this year, 67 percent are more likely to purchase one produced in the U.S. to avoid any tariff impacts. This mirrors the results of another recent survey from Cars.com, in which 73 percent of respondents said they would consider purchasing an American-made vehicle to avoid potential tariff costs.
Tesla took the top four spots in Cars.com's annual "American-Made Index," with Jeep, Kia, Honda, and Volkswagen also placing in the top 10.
What People Are Saying
LendingTree auto insurance expert Rob Bhatt said: "You may have to pay more if you wait to purchase. On the other hand, it's generally bad to rush into a car purchase that's going to require you to take on too much debt. If you're not financially ready to purchase a car just yet, it's usually better to get your finances in order first—but there isn't a one-size-fits-all solution."
What Happens Next?
Trump's 25 percent auto tariffs have been in effect since April, though exemptions are in place for USMCA-compliant auto parts and vehicles. In addition, the recent "Economic Prosperity Deal" signed between the U.S. and U.K., allows the latter to import up to 100,000 vehicles at a 10 percent rate.
However, at a White House event earlier this month, Trump said he might raise auto tariffs "in the not so distant future."
"The higher you go, the more likely it is they build a plant here," he said.