How will tariffs impact buying a car? A Pittsburgh dealership explains.
On April 3, new tariffs will hit cars coming into the U.S. from other countries. A 25% tariff has new car shoppers' attention, and may have some rushing to buy. But is that really necessary?
Think about the last car you purchased, whether it was new or used. Now add 25% onto that cost. Would you still have purchased it for that much money? That's exactly what car dealerships are worried about.
"It's gonna escalate the costs of the cars, quite a bit, over and above what the sticker prices of the cars are now," said Marc Rosenstein, the sales manager at Rohrich Cadillac.
The brand Rosenstein sells, Cadillac, won't be affected because they're made in the U.S. Across the street from him in the car-dealership-full West Liberty Avenue of Pittsburgh is Toyota and Lexus. Some of those models are made overseas, meaning they will be affected by the tariffs, as will many model cars.
"The tariffs, again, would be on the inventory coming in, not the current inventory that are in the dealerships at this point," Rosenstein said.
And new car shoppers are understanding that. Many dealerships across the Pittsburgh area as well as the country report overly high sales right now as people rush to beat the tariffs.
According to a recent study from Anderson Economic Group, prices can be expected to go up $4,000 to $12,000 per vehicle. But remember, that is for new cars made overseas.
"The other part of it is, OK, there's gonna be trade-ins coming in, so there's going to be a glut of used cars coming in, I would think, because of the business pick up, because people are under the assumption buy now before the tariffs," Rosenstein said.
Used car lots are also in on all this change. Many say they're buying used cars as fast as they can, basing that on the fact that once the costs of tariffs catch up to new car dealers, a lot more people will look toward used cars to avoid the higher costs.
Even if you're not looking to buy a car right now, chances are good you will be affected by the tariffs. Because if your car breaks down, or you need body work because you're in a crash, you'll need parts to fix that car. And it's almost guaranteed that those parts, even if your car is made domestically, come from overseas.