If you’ve been waiting to purchase a vehicle, you may want to do it sooner rather than later, as prices that have already been sky-high since the pandemic are set to rise thanks to President Trump’s tariffs.
Concerns about rising prices, specifically for automobiles, have resulted in Trump pausing his 25% tariffs on Mexico and Canada’s automobile imports.
According to a report from NewsNation, new car prices could rise by as much as $12,000 if President Donald Trump’s tariffs go into effect. This comes at a time when prices have already risen by an average of $10,000 over the last five years.
Cox Automotive data shows that the price of a new car has risen from around $38,000 in January 2020 to more than $48,500 in January 2025.
While some Americans have delayed plans to buy a new car, hoping that prices would return to pre-pandemic levels, experts are warning that prices could increase even more.
Patrick Anderson, the CEO of Anderson Economic Group (AEG), a Michigan-based economic consultancy, shared with CBS News that prices will either rise or supply will dwindle.
“These are cost increases that cannot be hidden from the consumer. Substantial portions, or perhaps all of it, will be passed along to consumers, or manufacturers will stop producing them,” Anderson told CBS MoneyWatch.
What cars will be most affected?
Edmunds data shows that 48.6% of all new vehicles sold through February were built in the U.S., with another 17.4% being built in Mexico, 7.4% in Canada, and 26.5% elsewhere.
Roughly a quarter of new Hondas sold in America are made in Canada, and 45% of Volkwagens are built in Mexico, along with 35% of Nissan’s automobiles and 28% of GM’s vehicles.
“In the short term, automakers will need to pull every available lever to minimize disruptions and soften the immediate impact, but there’s no escaping the fact that higher costs will ultimately be passed on to consumers,” Jessica Caldwell, Edmunds’ head of insights, said in a statement.
So when will prices rise?
While prices won’t skyrocket overnight, analysts share that consumers may start to see the impact of tariffs by as early as this summer, meaning prospective buyers should consider making the purchase now.
Tyson Jominy, vice president of analytics at J.D. Power, told CBS MoneyWatch that buying may be better done sooner rather than later.
“If you think you’ll need a car within the next several months, you should probably get into the market sooner rather than later,” Jominy said.
Still, Jominy says consumers shouldn’t panic buy, but instead do their homework before they purchase a vehicle.
“But if you’re planning to be in the market the first half of the year, it probably makes sense to speed up what you can and make sure you’re ready to go,” he said.