3 min read
If you’ve been car shopping lately and felt your wallet flinch, you’re not imagining things. Car prices have been climbing, and one of the sneaky culprits might just be tariffs. So, what exactly are car tariffs, and why do they matter when you're deciding whether to hang on to your old ride or finally say goodbye to your trusty clunker? Let’s break it down.
What are tariffs on cars?
Tariffs are basically taxes that governments slap on imports and exports. When it comes to cars, a tariff is a fee the U.S. charges when foreign-made vehicles or parts roll into the country. Think of it like a cover charge for international cars entering the U.S. auto scene.
The idea is to encourage people to buy domestically-made vehicles and protect American manufacturing. But here’s the thing, most modern cars, even the “Made in the USA” ones, use parts from all over the globe. So even a small tariff can ripple through the supply chain and bump up prices on just about everything, from that sleek European sedan to your average midsize SUV.
Are car prices going up due to tariffs?
In short: yep. Tariffs on imported vehicles and parts can raise production costs for automakers, and they’re not just absorbing those costs out of the goodness of their corporate hearts. They're passing them right along to the car buyers (that’s you).
For example, if the U.S. imposes a tariff on steel or aluminum, it costs more to build a car. If a particular model is imported directly from another country (hello, Germany or Japan), that price can shoot up even more. Suddenly, your dream car is hundreds, or even thousands, of dollars more expensive than it was last year. Fun!
What cars are not subject to tariffs?
Some vehicles dodge the tariff trap by being built here in the U.S., even if the badge says Toyota, Honda, or BMW. Many international automakers have factories in the U.S. (shoutout to Kentucky-built Camrys and Alabama-assembled Hyundais), so their cars aren’t subject to the same import taxes.
Also, cars that qualify under trade agreements like USMCA (the replacement for NAFTA) may be exempt from certain tariffs, as long as they meet specific rules about where they’re made and where their parts come from. So if you’re buying a vehicle made in North America, there’s a better chance you’ll avoid the extra markup.
Final thoughts
Car tariffs can make new rides more expensive, especially if they’re imported or use a lot of foreign parts. But if tariffs aren’t your problem and you’re just looking to upgrade, why not cash in your current car first?
At Peddle, we make it ridiculously easy to sell your car, no haggling, no stress. Get an instant offer, schedule free pickup, and get paid fast. Whether you’re buying new, used, or just clearing space in the driveway, we’ve got your back.
