If you’ve recently gone car shopping, whether online or in person, you’ve probably noticed something: prices have gone up significantly. Whether you’re looking for a new electric car, a family SUV, or even a used car, you might have been shocked by the cost. One major reason for this increase in car prices is the new tariffs put in place by the Trump administration. These tariffs are having a big impact on car prices and the car-buying experience in the United States.
In March 2025, President Donald Trump introduced a 25% tariff on automobiles and automobile parts coming into the U.S. from countries like Canada, Mexico, and China. This means that any cars or car parts that come into the country from these places are now taxed at a much higher rate. The goal of these tariffs was to protect American jobs and push car companies to build more cars in the U.S. Instead of achieving that, however, the tariffs have mostly resulted in higher prices for American consumers, which has made it more difficult for people to afford cars.
Experts estimate that these tariffs could cause a significant rise in car prices. According to the Anderson Economic Group, the price of certain electric vehicles could increase by as much as $12,000. Full-size trucks and SUVs could see price increases between $8,000 and $9,000, and even smaller cars could become more expensive. Because of these higher prices, more people are deciding to hold off on buying a new car or switching to used cars instead. This has already affected car sales, and experts predict that the number of cars sold in the U.S. could drop by a million or more by the end of 2025.
It’s not just the price of new cars that’s rising. Car parts are also getting more expensive, which is impacting how cars are made. Car companies don’t just use American-made parts to build their vehicles. They rely on parts from all over the world, including things like engines, batteries, and electronics. Since tariffs make these parts more expensive to import, car companies have to raise their prices to cover the extra costs. Even things like shipping and transportation costs are going up because of the tariffs, making it harder for car companies to keep prices low.
In response to these changes, Ford CEO Jim Farley spoke out about the impact the tariffs are having on the auto industry. During a recent meeting with analysts, Farley said, Farley also warned that the tariffs would mean higher prices for customers, which could put the cost of a new car out of reach for many Americans. He explained that the high price of cars could lead to people waiting longer to buy a car or choosing to repair their current vehicle instead of buying new.
While new car prices are climbing, used car prices are also going up. With more people looking for used cars instead of new ones, the demand for used cars has skyrocketed. This higher demand is pushing up prices for used vehicles as well. A car that was worth $10,000 last year might now cost $12,000 or more. Even though used cars are often seen as a cheaper option, they’re becoming less affordable because of the tariffs.
Another part of the problem is that repair shops are struggling too. Mechanics across the U.S. are facing higher prices for car parts, and in many cases, they’re dealing with longer wait times to get the parts they need. Something as simple as getting a new battery or brake pads can now take longer and cost more. For many Americans, especially those with older cars, this means more money spent on repairs and longer waits to get their vehicles fixed.
Many Americans are frustrated with the situation. A recent CBS News/YouGov poll showed that 75% of people believe the tariffs will raise prices across the economy, with cars being one of the main concerns. Even among Trump supporters, there’s a divide. While some agree with his goal of strengthening American manufacturing, they don’t like the way these tariffs are making everything more expensive.
At the same time, the Trump administration insists that the tariffs are part of a larger plan to bring more manufacturing jobs to the U.S. The idea is that by making it more expensive to import cars, companies will be encouraged to build more cars here in America. However, this plan could take many years to work out, and in the meantime, consumers are stuck with higher prices and fewer options when it comes to buying cars. Even car companies are uncertain about how long it will take to see the benefits of these tariffs, and whether they’ll outweigh the negative effects on car buyers.
In conclusion, the tariffs put in place by the Trump administration in 2025 have made buying a car in the U.S. much more expensive. Whether you’re in the market for a new car or trying to find a good deal on a used one, the costs are rising. While the hope is that these tariffs will help American car companies in the long run, for now, they’re only creating more challenges for everyday Americans trying to buy or fix their cars.
