Trump’s tariffs will raise car prices. US-made vehicles average $53,000

Trump administration While major automakers are trying to encourage production to move to the US, a recent report highlights how much more Americans have to pay if that happens.

Since Trump imposed a 25% tariff in April All imported passenger cars, Automobile experts are concerned that the costs of new vehicles across the industry will become a huge hit.

In May, administrators imposed another 25% tariff on auto parts such as engines, transmissions, power generation parts and electrical components. This means that even vehicles already manufactured domestically will be affected by the higher costs of imported auto parts, except for exemptions made for parts complying with the US-Mexico-Canada agreement.

The administration sees tariffs as a way to boost domestic manufacturing, but a vehicle fully assembled in a US factory costs an average of $53,000, according to a recent report from Cars.com.

Trump’s tariffs can increase car repair costs, experts say

Cars.com industry analyst David Greene said Fox Business American-Made Cars is becoming increasingly difficult for both economic and structural reasons.

For one thing, Green pointed out that vehicles assembled in the US now average over $53,000. It’s expensive on the market. By comparison, cars built in Canada averaged $46,000, while cars built in Mexico averaged $42,000.

“That premium focuses on production focusing on higher labor costs, stricter safety and emissions standards, and larger margin vehicles such as full-size trucks and SUVs,” Green said. This, he added, is an affordable small car that is already short on affordable “is not a priority for most American plants.”

Auto dealers use AI tools to travel to combat the effects of playing cards’ automatic rates

Budget-friendly models, especially those priced under $30,000, are produced primarily overseas due to their low manufacturing costs. In fact, 90% of these vehicles were imported in April.

This includes popular entry-level models such as the Hyundai Elantra, Kiaforte and Nissan Sentra. Note that Green is only built in the US in the US, including the Toyota Corolla and Honda Civic, with only two models under $30,000. A small portion of total inventory. According to Green, some dealers may also have US-built stocks in Chevrolet Malibu that have been discontinued.

This highlights that, according to Green, it constitutes only 13% of new car inventory in April, which is the most “vulnerable” to tariffs.

According to data from Cars.com, the average price for Mexican-made vehicles already won $1,100 in April, with overall new car prices rising 0.8% year-on-year. Imports below $50,000, accounting for around 60% of all new vehicles, “bear the brunt of these increases and there are few affordable alternatives to dealer lots,” Green said.

Shoppers who rely on fundraising and leases are also inevitable. According to Edmunds, new cars’ APRs were higher in April compared to the third quarter of 2024.

“Leasing, a once-monthly way to cut costs, has become less attractive as car manufacturers cut their incentives, especially for European brands whose lease activity fell by 3.6 percentage points in April alone,” Green said.

Click here to get your Fox business on the go

According to Green, the most vulnerable vehicles on the market today are:

• Imports under $30,000. Availability is reduced and prices are rising
• Imports ranging from $30,000 to $49,000. This constitutes the fastest growing price tier, with over 50% imported
• Luxurious European imports with reduced lease incentives and tariff costs reaching both availability and monthly affordability

Shoppers hit the most violently:

• Budget-conscious buyers and first-time shoppers rely on cars that typically cost under $30,000. They have a decline in options supply.
• Middle-income families who frequently shop between $30,000 and $49,000 are still facing tariff-related price increases
• Shoppers who target leases, particularly luxury and imported brands, are shoppers who trade less.
• Brandroy buyers are forced to expand their search. Shoppers affected by tariffs are considering an average brand from 1.6 to 4.1.