\u201cThere is no way you\u2019re going to see a better discount if you wait three months,\u201d one analyst said.<\/p>\n\n\n\n
Holding out for a bargain on your next car purchase or a major repair? Don\u2019t, experts say.<\/p>\n\n\n\n
President Donald Trump\u2019s 25% tariffs on steel and aluminum took hold last week<\/a>, and the monthlong reprieve<\/a> he offered U.S. automakers from his 25% tariffs on imports from Mexico and Canada ends April 2, threatening to drive up costs for vehicles and auto parts in coming weeks.<\/p>\n\n\n\n \u201cThere is no way you\u2019re going to see a better discount if you wait three months,\u201d said Ivan Drury, director of insights at Edmunds. \u201cThat\u2019s guaranteed.\u201d<\/p>\n\n\n\n Concerns about imminent price hikes come just as the auto market shows signs of stabilizing. The latest consumer price index showed new vehicle costs down 0.3%<\/a> last month from the year before and those for used cars and trucks 0.8% higher over the same period \u2014 both far lower than the 2.8% annual inflation rate overall<\/a>.<\/p>\n\n\n\n Those trends aren\u2019t likely to last, analysts warn. Tariffs are expected to drive up auto costs by $4,000 to as much as $12,500 depending on vehicle, engine type and country of origin, according to the Anderson Economic Group, a consultancy that represents automakers and dealers.<\/p>\n\n\n\n It isn\u2019t just U.S. car brands like those made by Ford, General Motors or Jeep producer Stellantis that are set to be affected, the group said. Honda, Toyota, Audi and BMW are among the foreign automakers with extensive production in North America that could raise prices, too.<\/p>\n\n\n\n \u201cWe\u2019re potentially undermining one of the most important elements of the U.S. economy, which is our ability to manufacture products in the United States using parts from Canada [and] Mexico,\u201d Patrick Anderson, the firm\u2019s CEO and founder, said of White House trade policies. It remains to be seen whether tariffs \u201cend up causing more damage than benefit,\u201d he said, but already, \u201cwe\u2019ve rattled consumers.\u201d<\/p>\n\n\n\n A White House spokesperson didn\u2019t immediately respond to a request for comment.<\/p>\n\n\n\n Many drivers are already stressed about potential car purchases. The share of consumers who expect to be rejected for auto loans hit 33.5% in the latest New York Federal Reserve survey<\/a>, the highest in its 12-year history. People in the market for new North American-built vehicles could also face an availability crunch, experts say. A recent forecast<\/a> from S&P Global Mobility predicted regional production could drop by as much as 20,000 units per day within a week of the Canada and Mexico tariffs\u2019 taking effect.<\/p>\n\n\n\n \u201cIf you have a tariff situation that changes your inputs in the vehicle, you\u2019re naturally going to want to find that mix \u2014 between the vehicle content that is most appealing to consumers and knowing that it\u2019s going to cost them more,\u201d said Stephanie Brinley, an automotive analyst at S&P Global Mobility. For automakers, she said, the question is: \u201cHow do you protect margins, and how do you work through that?\u201d<\/p>\n\n\n\n Many of the perks available to prospective buyers could dry up soon, experts said, as manufacturers and dealerships start trimming rebates, financing promotions and other offers as they look to offset higher costs.<\/p>\n\n\n\n \u201cYou could even see incentives being pulled back, like a $3,000 cash back offer that could go away immediately, overnight,\u201d Drury said.<\/p>\n\n\n\n He and Anderson both said they expect used vehicles\u2019 price to rise, as well, in part because auto lessees wary of purchasing tariff-inflated vehicles will hold on to their leased wheels for longer. While that would boost the values of well-maintained vehicles already on the road, it would also tighten up used vehicle inventories, Drury said, potentially re-creating the lopsided pandemic-era market.<\/p>\n\n\n\n There\u2019s not much U.S. consumers can do to mitigate the ripple effects, industry analysts said, given the broad-based nature of the tariffs and the chill they threaten to create among automakers. But it will help to know where your vehicle is made and which components are imported versus manufactured stateside, Drury said. He suggested consumers keep on hand the American Automobile Labeling Act report<\/a>, a document the Transportation Department publishes annually that lists every vehicle model along with the origins of its composition.<\/p>\n\n\n\n \u201cIt should give somewhat of a guidance, because you cannot assume the badge on the hood matches your expectation [of] where it\u2019s made,\u201d Drury said. \u201cThere\u2019s no vehicle where every single component is manufactured from the ground up in the United States.\u201d<\/p>\n\n\n\n Brinley cautioned consumers against trying to \u201cgame\u201d tariffs by compromising on what they actually need. While trade duties are widely expected to fuel price hikes throughout the auto market, completely rewriting your goals for such an important purchase could end up costing more, she said.<\/p>\n\n\n\n \u201cBuying something that doesn\u2019t fit your life, is the wrong size and doesn\u2019t work for you because you perceive the tariff impacts to be lower may not actually improve your life,\u201d Brinley said.<\/p>\n\n\n\n You may need to adjust your budget, but \u201cin some ways,\u201d she said, \u201cshop as you always have.\u201d<\/p>\n\n\n\n