MOTORISTS hoping to score a great deal on a new car this year may face an unwelcome surprise, as dealerships warn of significant price increases on the horizon.
The entire US auto industry is bracing itself as President Trump’s 25% tariffs on goods from Mexico and Canada will come into force on March 4.
GettyDonald Trump’s planned tariffs on the auto industry will have a huge, knock-on effect[/caption] GettyIt’ll likely see car brands raise their prices, with dealerships across the nation forced to do the same[/caption]It’ll likely see the consumer forced to foot the bill, as car brands pass on the extra cost to dealerships, who will in turn pass it onto buying customers.
Jeff Tamaroff, a car dealer based in Southfield, Michigan, told WXYZ-TV reporters that concerns relating to tariffs are currently at the top of the mind of everyone in the industry.
“It’s going to affect us. It’s got to,” he said.
Tamaroff’s business sells new and used vehicles at both Honda and Nissan dealerships, with his outlet renowned for giving customers great deals.
But now, he expects the Trump administration’s plan to impose 25% tariffs on Canada and Mexico to affect nearly everything sold in US showrooms – including his.
He added: “It’s got to be passed on. It’ll be passed onto us, and we’ll have to pass it down to the customer.”
However, it won’t be quite as bad as some may think.
According to Oakland University economics professor Michael Greiner, a 25% tariff won’t be the same as a 25% bump in sticker price.
Indeed, vehicles may only see a 25% rise on whatever portion of the car is made in Canada or Mexico.
In one example, if 15% comes from Mexico, a sticker price of $34,690 would increase by roughly $1,300.
Even so, Professor Greiner fears it could become too expensive for dealerships to stay open and even cause harm to the economy, while global manufacturing has made it essentially impossible to buy a vehicle made solely in the U.S.
Greiner added: “The North American market is completely integrated where cars are going back and forth from the United States to Canada and Mexico and back to the US again.”
Meanwhile, Tamaroff, who mentioned inventory is high at the moment, meaning there is currently the potential for better deals, is also concerned that stress-levels will increase at dealerships.
He said: “It will eventually if it goes into effect.”
This comes as dealership chain Autonation, Inc. has been fined $650,000 after breaking a “pink slip” rule.
A vast network of dealers owned and operated by a car-selling giant has been ordered to pay a sizable sum by a judge in Riverside County, California.
The auto dealerships were accused of violating laws related to the transfer of registration and ownership of used cars.
In California, used car dealers must submit an application to the Department of Motor Vehicles (DMV) to transfer registration to a buyer within 30 days of a car’s sale.
That same 30-day deadline applies to the certificate of ownership – commonly known as a “pink slip.”
However, these deadlines can be extended if the DMV returns an application to the dealer due to missing information.
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