It’s basically impossible to actually know anything anymore, but unless something changes, Trump’s auto tariffs will go into effect this week. While Republicans insist the tariffs will make the U.S. rich, what’s most likely going to happen is that vehicles will get more expensive across the board as automakers raise the price of everything they sell, including the ones they build in the U.S., to offset the cost of the tariffs. That will then drive up the price of used cars, as well as repairs and your insurance premium.
What’s a little less clear is how things will play out on the sales front. Even with tariffs in effect, demand for reliable, practical vehicles will probably drop the least, so even if overall sales are down, I wouldn’t be surprised if companies like Toyota and Lexus continue to look pretty good. As Reuters recently highlighted, Toyotas are still in short supply, and Toyota buyers tend to want what they want even if they could get a comparable Honda or Hyundai faster and possibly cheaper.
On the other hand, there’s a good chance I’m one of the last people to pick up a new Fiat 500e. As much as I love mine, I also only leased it because it was so cheap, and I’m a weirdo who’s on his third 500e since the first-gen model went on sale here. The Fiat is built in Italy, so they’re definitely getting more expensive, and I wouldn’t be surprised if Fiat pulled it from the U.S. in the next couple of months.
Still, the 500e wasn’t exactly selling in big numbers before Trump announced the tariffs. Odds are, some other car is going to see a much more drastic drop in sales. The question is, which one do you think it will be?
