Latest news with #AaronBragman
Yahoo
02-04-2025
- Automotive
- Yahoo
Should you buy or lease a car now?
With a 25% tariff about to hit every imported car, many Americans are wondering whether it's better to buy or lease a vehicle before tariffs go into effect, or wait to see how things will play out. The simple answer is to buy now, experts say, especially if you are already in the market for a car. 'The riskiest thing to do is to hold off and see what happens,' Aaron Bragman, the Detroit bureau chief of automobile shopping site said to CNN. 'We're fairly confident that costs and prices are going to go up — that's just the basic economics of tariffs.' President Donald Trump last week announced a 25% tariff on all cars imported from foreign countries, including Canada and Mexico. The tariff could raise prices between $5,000 to $15,000 per vehicle, depending on the make and model, according to Goldman Sachs estimates. And the Trump administration could further send the automobile industry spiraling if it follows through with its plan to enact tariffs on car parts — since even American-made cars import a significant portion of their parts from Canada and Mexico. That could further slam car buyers if enacted. For example, cars from Ford, Chrysler, GM and Honda are expected to face cost jumps from $4,000 to $10,000, according to a February estimate from Michigan-based think tank Anderson Economic Group. Electric car buyers are expected to pay at least $12,000 more per vehicle. Some Americans have already begun rushing to dealerships to buy vehicles before price increases take place. And for those who haven't made their way to the dealership, there's still been a spike of interest in car-buying. Traffic on both Kelley Blue Book and increased by 30% between last Wednesday, the day tariffs were announced, and Monday, compared to the same time period the year prior. And traffic on the hundreds of dealership sites run by Cox Automotive jumped by 20%. Jenni Newman, editor-in-chief, also noted that no vehicle currently on a dealer lot should have a tariff fee until after the tariffs go into effect on April 3. Bragman did note, however, that finding a deal on a dealer lot could get increasingly difficult because dealers know that prices are going to be higher on incoming inventory. Inventory is decent, especially compared to the era supply chain shortages during the Covid-19 pandemic. Customers shouldn't have a hard time finding well-stocked dealer lots, but as time goes on, there may be fewer deals and incentives. Besides the initial tariff costs, automakers may also start cutting production, simply because demand is likely to wane, Bragman said. That could cause dealer inventory to thin out and prices to increase. As prices go up, more people will likely look into buying used cars. However, the inventory for used cars is already low, because automakers didn't produce as many cars during the pandemic and those cars would be in the used marketplace today, executive editor Brian Moody told CNN. A spike in demand would only exacerbate the used car market. And for those looking for affordable vehicles, there could be even fewer options available if tariffs continue. There are only 27 new vehicles on the market priced under $30,000, and four have already been discontinued, Cox Automotive analyst Erin Keating wrote in a note on Friday. Though Keating said cheaper models made up 13% of all vehicles sold in the US in 2024, those models are often the first to get cut. Most cheaper cars, even for American brands like Ford, are not made in the United States and are instead assembled in countries with cheaper labor, like Mexico. But customers will have about a year to prepare if a car model is discontinued, Moody said, because manufacturers usually have a backlog in their inventory. What isn't guaranteed is when exactly those price increases will take place. Even so, automakers are worried about the volatility, Bragman said. 'Frankly, if you can find a vehicle, you can find something that you can afford, we're telling people to go for it,' Bragman said. CNN's Elisabeth Buchwald, Rachel Wilson, Alex Leeds Matthews and Auzinea Bacon contributed to this report.
Yahoo
29-03-2025
- Automotive
- Yahoo
'Now is the time' to buy a car before auto tariffs take hold
If you're in the car market, now is the time to buy before price volatility affects both new and used cars. Aaron Bragman, Detroit bureau chief, joins Wealth host Brad Smith to discuss car purchases amid tariff concerns. Bragman explains that although tariffs haven't impacted vehicle prices yet, dealers may eventually add extra costs. To watch more expert insights and analysis on the latest market action, check out more Wealth here. What can potential buyers, folks who are in the car market right now and going to dealerships, kicking the tires, what can they do to ensure that they're not going to get swept up in just the tariff talk by sales people who are on the lot saying, hey, this is just going to cost you more, especially if the vehicle shouldn't be subject to it? Well, the thing is right now there are no vehicles necessarily that are subjected to these tariffs. So if they're going to a dealer lot and they're seeing a dealer say this additional price adder that you see at the bottom of the sticker is because of the tariff changes, that's not a thing yet. So that's not something that should be allowed. You should actually challenge that if you see that on a sticker. Coming down the pipe in a couple of a couple of weeks, that could be a factor. You could see some price changes, but as of right now, no automakers have officially made any kind of price changes. So any kind of adders to that are something that should be challenged. But it's also, we think key, if you're going to look at buy a vehicle over the next couple of weeks, now is the time to buy because there is price volatility coming and not just in the new car market. We're also likely to see that in the used car market as well due to demand. How do you think this will shift some of the most popular, most commonly sold used vehicles since you brought up that market as well? Well, the used vehicle market's also very interesting. We've got a very low supply of used vehicles right now because coming off of the COVID years, where we had a lot of depressed sales, there isn't a whole lot of those new vehicles that have made it into the used market. So as new vehicle prices go up, which they almost certainly will, demand for less expensive used cars is going to go up. And if you have a small supply of those used cars, that price is also going to go up, which is great if you're trading one in and you want maximum value on your used car. Not so great if you're looking to replace the vehicle you have with another used car, that just means it's going to be more expensive too. Yeah, we were talking about some of the elements from a JD Power report published yesterday, saying that the used market also being influenced by the emerging tariff related price concerns, effect not yet material they say, but any increase in new vehicle prices, as you noted Aaron, will inevitably lead to higher used vehicle prices as well here. Aaron, thanks so much for taking the time and breaking this down. My pleasure. Thanks for having me. Sign in to access your portfolio
