Latest news with #Edmunds.com
Yahoo
13 hours ago
- Automotive
- Yahoo
Despite two months of tariffs, car prices aren't going up. Is now the time to buy?
American car buyers braced for the worst when President Donald Trump's auto tariffs started taking effect in April. But so far, prices are little changed. However, industry experts don't expect that will remain true for long if tariffs stay in place— so Americans may want to buy a car now before prices start to rise within a few months. 'So far there's a mismatch between the expectation of what would happen, and the reality of what has happened with prices,' said Ivan Drury, director of insights at car buying research site 'But I still think we're still going to prices start to take off in two to three months.' Even with 25% tariffs on all imported cars and auto parts, prices are mostly being kept in check. The price paid for new cars in May fell 0.2% on average compared to the month before, according to data from Edmunds, and they rose only 2.5% compared to the pre-tariff period in March. That was also reflected in the government's consumer price index for May, which reported both new and used car prices dipped when adjusted for seasonal factors. There are numerous factors keeping prices steady. Tariff fears kept buyers away in April and May, and reduced demand limited the dealers' ability to raise prices. Experts CNN spoke to say the auto industry is also concerned about announcing big price hikes that could anger the Trump administration. But mostly, dealers are still working through their supply of pre-tariff cars. Most of the cars that have been sold since the imposition of tariffs in April were either imported into the United States or built before the tariffs went into effect, Drury said. 'The impact is not there yet,' he said. In March, automakers had between a 30- and 77-day supply of cars on the lots, depending upon the manufacturer, according to Edmunds. Additionally, the customer demand simply is not there. Some buyers rushed to buy cars in March before the tariffs were put in place, creating a surge in sales in the first quarter and weakening demand since then. Plus, concerns about the economy and job security, along with high interest rates, could be keeping some from making a big purchase. While Edmunds has yet to give a second-quarter sales forecast, Drury said 'the odds are good' that trend will continue and sales will be down or, at best, flat compared to the same time last year. But Drury said the lack of price increases could start to draw consumers back into the car buying market later this year. The Conference Board reported in May that 12.1% of Americans consumers were considering purchasing a new car in the next six months. That's a significant jump from the 10.6% who said the same in April, and more in line with normal seasonal interest in car purchases. When customers do jump back into the market for a car, they may see prices creep up. Every automaker is affected by the tariffs. Except for Tesla, every major company imports cars they sell at US dealerships from foreign plants, accounting for 46% of US auto sales in 2024, according to S&P Global Mobility. Even those built at American factories use imported parts. Drury said some manufacturers are already raising costs in ways that don't show up in the price, like adding fees and reducing incentives offered to buyers. But as tariffed vehicles begin to hit the lots, experts expect them to eventually pass some of that cost on. Car prices are not set by the automakers – they're negotiated between dealers and buyers. But automakers do set a 'manufacturers' suggested retail price' or MSRP, also known as the sticker price. Adam Jonas, auto analyst at Bank of America, thinks that automakers will likely raise the MSRP later this year when the 2026 model year cars start being delivered to dealers. 'We're hearing price hike announcement slowly,' Jonas said at a recent Bank of America conference. 'I think with the changeover to 2026 models, (that) will be the opportunity for companies to raise prices on new vehicles so they don't enrage certain folks that might come down on them for raising prices.' Until then, automakers are willing to pay some of the cost of tariffs out of reduced profits, partly due to weaker demand from buyers, partly to avoid angering the Trump administration. Drury said even when do automakers raise prices, they will be careful not to attribute the increases to tariffs. 'I think they've learned there's nothing good that comes from doing that,' he said.
Yahoo
14 hours ago
- Automotive
- Yahoo
Despite two months of tariffs, car prices aren't going up. Is now the time to buy?
American car buyers braced for the worst when President Donald Trump's auto tariffs started taking effect in April. But so far, prices are little changed. However, industry experts don't expect that will remain true for long if tariffs stay in place— so Americans may want to buy a car now before prices start to rise within a few months. 'So far there's a mismatch between the expectation of what would happen, and the reality of what has happened with prices,' said Ivan Drury, director of insights at car buying research site 'But I still think we're still going to prices start to take off in two to three months.' Even with 25% tariffs on all imported cars and auto parts, prices are mostly being kept in check. The price paid for new cars in May fell 0.2% on average compared to the month before, according to data from Edmunds, and they rose only 2.5% compared to the pre-tariff period in March. That was also reflected in the government's consumer price index for May, which reported both new and used car prices dipped when adjusted for seasonal factors. There are numerous factors keeping prices steady. Tariff fears kept buyers away in April and May, and reduced demand limited the dealers' ability to raise prices. Experts CNN spoke to say the auto industry is also concerned about announcing big price hikes that could anger the Trump administration. But mostly, dealers are still working through their supply of pre-tariff cars. Most of the cars that have been sold since the imposition of tariffs in April were either imported into the United States or built before the tariffs went into effect, Drury said. 'The impact is not there yet,' he said. In March, automakers had between a 30- and 77-day supply of cars on the lots, depending upon the manufacturer, according to Edmunds. Additionally, the customer demand simply is not there. Some buyers rushed to buy cars in March before the tariffs were put in place, creating a surge in sales in the first quarter and weakening demand since then. Plus, concerns about the economy and job security, along with high interest rates, could be keeping some from making a big purchase. While Edmunds has yet to give a second-quarter sales forecast, Drury said 'the odds are good' that trend will continue and sales will be down or, at best, flat compared to the same time last year. But Drury said the lack of price increases could start to draw consumers back into the car buying market later this year. The Conference Board reported in May that 12.1% of Americans consumers were considering purchasing a new car in the next six months. That's a significant jump from the 10.6% who said the same in April, and more in line with normal seasonal interest in car purchases. When customers do jump back into the market for a car, they may see prices creep up. Every automaker is affected by the tariffs. Except for Tesla, every major company imports cars they sell at US dealerships from foreign plants, accounting for 46% of US auto sales in 2024, according to S&P Global Mobility. Even those built at American factories use imported parts. Drury said some manufacturers are already raising costs in ways that don't show up in the price, like adding fees and reducing incentives offered to buyers. But as tariffed vehicles begin to hit the lots, experts expect them to eventually pass some of that cost on. Car prices are not set by the automakers – they're negotiated between dealers and buyers. But automakers do set a 'manufacturers' suggested retail price' or MSRP, also known as the sticker price. Adam Jonas, auto analyst at Bank of America, thinks that automakers will likely raise the MSRP later this year when the 2026 model year cars start being delivered to dealers. 'We're hearing price hike announcement slowly,' Jonas said at a recent Bank of America conference. 'I think with the changeover to 2026 models, (that) will be the opportunity for companies to raise prices on new vehicles so they don't enrage certain folks that might come down on them for raising prices.' Until then, automakers are willing to pay some of the cost of tariffs out of reduced profits, partly due to weaker demand from buyers, partly to avoid angering the Trump administration. Drury said even when do automakers raise prices, they will be careful not to attribute the increases to tariffs. 'I think they've learned there's nothing good that comes from doing that,' he said.
Yahoo
06-06-2025
- Automotive
- Yahoo
Car prices hold steady in May despite tariffs
Even with new tariffs on imported cars and car parts, American car buyers paid slightly less in May for new vehicles. Data from on Thursday showed that the the average price paid for new cars edged down 0.2% to $48,334 last month compared to April. The dip came despite higher prices from automakers: The average new-car sticker price automakers requested rose 0.2% last month, to $50,527. The prices are good news for buyers worried that tariffs would put vehicles out of reach, especially with car prices near record highs already. But it could also signal weaker demand and consumer reluctance to spend. Car prices are not unilaterally set by automakers, but through negotiations between car dealers and car buyers. The 25% tariffs on imported cars and parts took effect April 3. Every major automaker that sells cars in America, other than Tesla, imports vehicles. Nearly half of US auto sales last year – 46% – were imports. A month later, in May, 25% tariffs on imported auto parts went into effect, which is important because every car built at US auto plants has some imported parts. The two tariffs are costly for automakers: General Motors has said it expects tariffs to cost it $5 billion by the end of this year. Most of the cars sold in May arrived at US dealerships before the tariffs on cars and car parts took effect. Automakers, scared of spooking customers and risking President Donald Trump's ire, have been slow to announce price increases despite their rising costs. Executives from Ford and General Motors have said they don't expect significant car price increases throughout the year. Part of that is because the demand for car sales has softened recently. With low consumer confidence and high interest rates, fewer Americans are considering buying new cars, according to a survey by The Conference Board, which tracks consumer attitudes. And many car buyers rushed to buy cars in March before the tariffs took effect. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNN
27-03-2025
- Automotive
- CNN
Car prices will surge by thousands of dollars because of Trump's tariffs. It'll happen before you expect it
Get ready to pay more for your next car. Auto prices in the United States will start to rise very soon – perhaps within the next few weeks. That's because President Donald Trump once again announced plans for 25% tariffs on imported cars and parts that will go into effect April 3, a move that will raise the cost of producing all cars sold in the United States – both imports and those built in American factories – by thousands of dollars each. Those additional costs will rapidly lift car prices if the tariffs go into effect. Previous plans for tariffs had been paused or postponed twice. 'It is going to be expensive,' said Ivan Drury, director of insights at He said it will be an unpleasant sticker shock that could come much sooner than most people realize, even before some of the cars that will now cost more to produce arrive at their local dealerships. 'It's too soon to tell how much,' he said. 'But it'll be a couple of thousands of dollars, if not more.' Automakers won't necessarily raise their wholesale prices, which are paid by dealers, by the full cost of the tariffs, said Drury. But there are other way to pass on the costs to car buyers. 'They can simply remove some incentives that are quite lucrative,' he said. If automakers drop an offer for car loans at a subsidized 1.9% interest rate, it will reduce their costs, but raise the cost to car buyers by $6,000 to $7,000 per car, Drury added. Although the tariffs are aimed at boosting US manufacturing by steering buyers to American-made cars, automobiles built in US factories will still be hit with tariffs. That's because there is no such thing as an all-American car. All 10.2 million cars built in US factories last year were built with a significant number of imported parts, mainly from Canada and Mexico. 'The average domestic content is conservatively estimated at only 50% and is likely closer to 40%,' said a fact sheet published Wednesday by the Trump administration. Thus, an 'American' car that costs $40,000 to build could be hit with $5,000 in tariffs because half of its parts come from other countries. Trump on Wednesday in the Oval Office predicted car prices would fall because of tariffs. 'You're going to see prices going down, but it's going to go down specifically because they're going to buy what we're doing, incentivizing companies and even countries with companies to come into America and build,' Trump said. But industry experts expect the opposite: Prices will rise for manufacturers and customers. Estimates about the impact of tariffs on production costs range between $3,500 to $12,000 or more per vehicle, depending upon the model, according to the Anderson Economic Group, a Michigan-based think tank. 'There's probably not a vehicle on the market today that wouldn't be affected in some form or fashion by tariffs,' Peter Nagle, automotive economist for S&P Global Mobility, told CNN recently. 'I would think prices would start to change in the one-to-two weeks after the tariffs go into effect.' The additional cost of the tariffs is only part of the pricing story, Drury said. Car prices are decided largely based on the millions of individual negotiations that take place between a car dealer and a car buyer. 'Yes, cost is a factor. But at the end of day, the price agreed upon is basic economics, supply and demand,' he said. And that's the reason why car prices could start to climb even before vehicles affected by tariffs arrive at your nearest car dealership, Drury said. For most automakers other than Tesla, the dealers who are negotiating with buyers are independent business owners who bought the cars at wholesale prices from the automakers, and then determine themselves how much to charge. 'The current inventory on the dealers' lots just went up in value,' Drury said. Dealers who know the next round of deliveries will cost more won't be as eager to cut a deal on their current supply of cars, even if their stock wasn't affected by any tariffs when they were purchased. The other major impact on pricing could come from significantly lower availability of cars. Automakers are likely to cut back on production of cars as they wait to see if tariffs prove to be short-lived. They may also be concerned that the additional cost of tariffs could price out some potential buyers. A reduced supply of new cars can drive up prices all by itself. That's what happened in 2021 when a computer chip shortage caused deep cuts in car production, which resulted in soaring prices for both new and used cars. The average transaction price quickly rose, jumping 17% for new vehicles between January and December of that year according to Edmunds' data. Prices for used cars jumped 32% during the same period. This time the impact could be similar. 'If the tariffs go through this time, by mid-April, we expect disruptions (to) virtually all North American vehicle production amounting to 20,000 fewer vehicles produced per day, which is about a 30% hit to production,' said Jonathan Smoke, chief economist for Cox Automotive, during a media call Wednesday. 'Bottom line, lower production, tighter supply and higher prices are around the corner, reminiscent of 2021.' 'Few thought it could be possible that we'd break the chain with Mexico and Canada, but it seems like it's about to happen now,' he added. 'April 3rd seems a bit like a doomsday if those tariffs on Mexico and Canada go through.'
CNN
27-03-2025
- Automotive
- CNN
Car prices will surge by thousands of dollars because of Trump's tariffs. It'll happen before you expect it
Get ready to pay more for your next car. Auto prices in the United States will start to rise very soon – perhaps within the next few weeks. That's because President Donald Trump once again announced plans for 25% tariffs on imported cars and parts that will go into effect April 3, a move that will raise the cost of producing all cars sold in the United States – both imports and those built in American factories – by thousands of dollars each. Those additional costs will rapidly lift car prices if the tariffs go into effect. Previous plans for tariffs had been paused or postponed twice. 'It is going to be expensive,' said Ivan Drury, director of insights at He said it will be an unpleasant sticker shock that could come much sooner than most people realize, even before some of the cars that will now cost more to produce arrive at their local dealerships. 'It's too soon to tell how much,' he said. 'But it'll be a couple of thousands of dollars, if not more.' Automakers won't necessarily raise their wholesale prices, which are paid by dealers, by the full cost of the tariffs, said Drury. But there are other way to pass on the costs to car buyers. 'They can simply remove some incentives that are quite lucrative,' he said. If automakers drop an offer for car loans at a subsidized 1.9% interest rate, it will reduce their costs, but raise the cost to car buyers by $6,000 to $7,000 per car, Drury added. Although the tariffs are aimed at boosting US manufacturing by steering buyers to American-made cars, automobiles built in US factories will still be hit with tariffs. That's because there is no such thing as an all-American car. All 10.2 million cars built in US factories last year were built with a significant number of imported parts, mainly from Canada and Mexico. 'The average domestic content is conservatively estimated at only 50% and is likely closer to 40%,' said a fact sheet published Wednesday by the Trump administration. Thus, an 'American' car that costs $40,000 to build could be hit with $5,000 in tariffs because half of its parts come from other countries. Trump on Wednesday in the Oval Office predicted car prices would fall because of tariffs. 'You're going to see prices going down, but it's going to go down specifically because they're going to buy what we're doing, incentivizing companies and even countries with companies to come into America and build,' Trump said. But industry experts expect the opposite: Prices will rise for manufacturers and customers. Estimates about the impact of tariffs on production costs range between $3,500 to $12,000 or more per vehicle, depending upon the model, according to the Anderson Economic Group, a Michigan-based think tank. 'There's probably not a vehicle on the market today that wouldn't be affected in some form or fashion by tariffs,' Peter Nagle, automotive economist for S&P Global Mobility, told CNN recently. 'I would think prices would start to change in the one-to-two weeks after the tariffs go into effect.' The additional cost of the tariffs is only part of the pricing story, Drury said. Car prices are decided largely based on the millions of individual negotiations that take place between a car dealer and a car buyer. 'Yes, cost is a factor. But at the end of day, the price agreed upon is basic economics, supply and demand,' he said. And that's the reason why car prices could start to climb even before vehicles affected by tariffs arrive at your nearest car dealership, Drury said. For most automakers other than Tesla, the dealers who are negotiating with buyers are independent business owners who bought the cars at wholesale prices from the automakers, and then determine themselves how much to charge. 'The current inventory on the dealers' lots just went up in value,' Drury said. Dealers who know the next round of deliveries will cost more won't be as eager to cut a deal on their current supply of cars, even if their stock wasn't affected by any tariffs when they were purchased. The other major impact on pricing could come from significantly lower availability of cars. Automakers are likely to cut back on production of cars as they wait to see if tariffs prove to be short-lived. They may also be concerned that the additional cost of tariffs could price out some potential buyers. A reduced supply of new cars can drive up prices all by itself. That's what happened in 2021 when a computer chip shortage caused deep cuts in car production, which resulted in soaring prices for both new and used cars. The average transaction price quickly rose, jumping 17% for new vehicles between January and December of that year according to Edmunds' data. Prices for used cars jumped 32% during the same period. This time the impact could be similar. 'If the tariffs go through this time, by mid-April, we expect disruptions (to) virtually all North American vehicle production amounting to 20,000 fewer vehicles produced per day, which is about a 30% hit to production,' said Jonathan Smoke, chief economist for Cox Automotive, during a media call Wednesday. 'Bottom line, lower production, tighter supply and higher prices are around the corner, reminiscent of 2021.' 'Few thought it could be possible that we'd break the chain with Mexico and Canada, but it seems like it's about to happen now,' he added. 'April 3rd seems a bit like a doomsday if those tariffs on Mexico and Canada go through.'
