ROCHESTER, N.Y. – On Wednesday, the president is expected to impose a 25 percent tariff on imported vehicles and parts. So, folks are flocking to car lots hoping to get ahead of the upcoming tariff tax. Ford alone saw a whopping 19% increase in sales last month.
Asked if local dealerships are seeing an increase in sales, Brad McAreavy, president of the Rochester Automobile Dealers Association responded, “We have. And I’ve read articles as well. I think Hyundai and Kia saw similar spikes as well.”
While many analysts predict tariffs could increase car prices by $5,000 to $15,000, McAreavy says price hike estimates are not easy.
“It’s really difficult to determine how and when any kind of tariffs are going to impact the vehicles, the price of vehicles, just because there are so many scenarios,” McAreavy said.
For example, many American cars were assembled here but the parts were imported, creating a complicated array of differing circumstances.
“The auto industry is a worldwide industry supply chain. It’s a worldwide manufacturing operation,” McAreavy said.
And that making things more confusing for car buyers. Another complicating factor is the United States Mexico and Canada Free Trade Agreement. It’s in place to encourage trade among the three countries, strengthening the North American economy. And according to a White House fact sheet, cars and parts manufactured in Canada or Mexico under that agreement will remain tariff-free. But even those cars may not escape the tariff tax. McAreavy explains manufacturers’ reasoning.
“I probably wouldn’t just have that vehicle affected by that tariff; I’d probably spread that tariff over a line of vehicles,” McAreavy said.
So, the price of each vehicle would go up a little rather than a select few increasing a lot. That means if you’re trying to buy a tariff-free car, you’re likely out of luck.
So, here’s the question you may be asking: Is now the time to buy a car before we begin to feel the impact of tariffs? Possibly. If you know you’ll likely need to buy another car before the end of the year, now is the time to start looking. McAreavy says most dealers have an inventory that lasts 60 to 75 days and those cars are of course, tariff-free. But McAreavy says don’t neglect your due diligence in the rush to beat the impact of the tariffs. Do your research.
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