If you were planning to buy a new car soon, you might need to rethink your budget.
The U.S. auto industry sold nearly 16 million light vehicles last year, including around 3 million passenger cars, according to Statista. The average new car in 2024 cost about $48,000, and while vehicle prices have been steadily rising for years, they’re about to climb even higher.
The reason? Donald Trump’s newly imposed tariffs.
Trump’s ‘Liberation Day’ and Its Impact on Car Prices
On April 2, 2025, Trump declared what he called Liberation Day, marking the implementation of sweeping tariffs on imports from nearly every country.
“This is Liberation Day,” Trump said in a speech.
“We’ve been waiting for a long time. April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to ‘Make America Wealthy Again.'”
As part of this policy, the U.S. is now imposing a 10% tariff on all imported goods and, more significantly for car buyers, a 25% tariff on imported cars and auto parts.
How Much Will Prices Rise?
Experts warn that these tariffs will drive car prices up significantly. Anderson Economic Group (AEG) estimates that the new policies could cost consumers an additional $30 billion in the first year alone.
For vehicles facing the lowest tariff increases, AEG predicts a price hike of $2,500 to $5,000. This includes small crossovers, sedans, and mid-sized SUVs that are assembled in the U.S. but still rely on imported parts.
Examples of vehicles in this group include:
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Honda Civic
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Honda Odyssey
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Chevy Malibu
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VW Jetta
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Ford Explorer
Mid-sized vehicles, including some Jeep, Ram, and Toyota truck models, are expected to see even steeper price hikes—$5,000 to $8,500 per vehicle.
What This Means for Car Buyers
With these tariffs in place, buying a new car in the U.S. is about to get much more expensive. If you’re in the market for a vehicle, you may want to act fast before dealerships adjust their prices—or start considering used or domestic-made models that may be less affected.
And the worst impacted cars? Full-size SUVs.
AEG explains: “The large SUV category includes models assembled in the US with parts from Canada, Mexico, and Europe, and having relatively high [manufacturer’s suggested retail prices].
“These vehicles are expected to see a tariff impact of $10,000 to $12,000, with some battery-electric vehicles incurring a potential tariff exceeding $15,000.”
Meanwhile, some luxury sedans, SUVs, and sports vehicles face a potential tariff exceeding $20,000, the site adds.
