When to start car shopping, doing repairs as auto tariffs loom
Consumers should not race to dealerships to buy a car in hopes of skirting President Donald Trump's new tariffs on auto imports, according to an industry expert.
Brian Moody, Autotrader's executive editor, said it is unwise because the tariffs will impact each car manufacturer to a different extent.
"It's going to impact different brands at different times. It's not going to just be one thing across the board," Moody told FOX Business. With uncertainty surrounding tariffs, it is almost impossible for consumers and dealers to foresee how it will impact cars today, according to Moody.
However, if they are in the market, he said that consumers should start researching now, regardless if they are looking for a new or used car.
HYUNDAI MOTOR COMPANY CEO TALKS $21 BILLION INVESTMENT IN US
Trump, who views tariffs as a way to bring in tax revenue to finance his plans for tax cuts while spurring a revitalization of domestic manufacturing, announced on Wednesday plans to impose a 25% tariff on all imported autos. He indicated that those tariffs, up from the 2.5% previously announced, would take effect on April 2, when his reciprocal tariff plans are also expected to be announced.
In his Oval Office remarks, Trump said the tariffs "will lead to the construction of a lot of plants, in this case auto plants, and you're going to see numbers that you haven't seen both in terms of employment. It take a little while, you'll have great construction numbers initially, and then ultimately you're going to have a lot of people making a lot of cars."
HYUNDAI TO INVEST $20B IN US MANUFACTURING
Some automakers have even started announcing plans to boost domestic production. For example, Hyundai revealed it will put $21 billion over the next few years toward boosting manufacturing in the U.S. However, car industry officials have stressed concerns that tariffs will exacerbate issues consumers face with new-car affordability in the near term, especially since car parts are sourced all over the world.
The National Auto Dealers Association CEO Mike Stanton said in February that tariffs on U.S. trading partners, "who are vital to our automotive supply chains, would make it harder for average Americans to afford the new vehicles of their choice."
The association said that no vehicles are built or assembled with 100% domestically made parts, which means any new auto or truck tariffs would harm all dealerships as well as their local communities due to increased vehicle prices, stifling demand for new vehicles and lost jobs.
Rather than tariffs, New Jersey-based Celebrity Motor Car owner Tom Maoli said that the administration should create tax incentives and low-interest loans in order to incentivize car companies to build plants in the U.S.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
"The thing that a consumer can do to arm themselves against some unknown thing is just start doing research now and maybe start the process a little earlier than you would," Moody said.
For instance, if a consumer is going to buy a car this fall, they should start doing research now and see if what they are interested in could be affected.
This applies to new and used cars, Moody said. He said that if new car prices jump then it will cause the demand for used cars to rise, subsequently pumping up their prices.
Additionally, if a car is in need of repairs, Moody said it is smart to bring it in as soon as possible. He said that the cost of repairs will rise as well because the cost of sourcing parts will become more expensive.