On April 3, 2025, a new 25% tariff on imported vehicles went into effect, bringing big changes for auto dealerships across the country. Nearly half of the new vehicles sold in the U.S. each year come from countries like Mexico, Canada, South Korea, Japan, and Germany. The added cost of these tariffs is expected to influence vehicle pricing, inventory decisions, and customer demand at the dealership level.
In the days leading up to the change, buyer activity spiked. Cox Automotive reported a 30% increase in traffic to sites like Kelley Blue Book and Autotrader, as shoppers rushed to lock in prices before increases took hold. But that rush may not last. Many experts expect sales to slow by summer as prices rise and consumers start to hold off on purchases.
Automakers are responding in different ways. Some are holding prices steady for now, while others are adjusting pricing or production plans. For dealerships, staying on top of these changes and preparing early will make a difference. To help clients, prospects, and others, Wilson Lewis has summarized the key details below.
Automakers are taking different approaches to manage uncertainty and maintain buyer confidence. Hyundai committed to holding prices steady through early June. Ford and Stellantis introduced promotional offers, including employee pricing programs. Nissan cut prices on several popular models, including the Rogue and Pathfinder.
Luxury brands are adjusting as well. Ferrari announced price increases of around 10 percent on most models but is covering the added cost for select vehicles. BMW is absorbing tariff costs on its Mexico-produced vehicles through at least early May. These actions show how varied the responses have been and how dealerships can be proactive, at least in near-term planning and promotions.
These vehicle tariffs are part of a broader shift in trade policy. New tariffs on raw materials like steel and aluminum are also affecting production costs. While the full impact isn’t yet clear, many expect costs to continue rising across the industry.
The National Automobile Dealers Association (NADA) and the American Truck Dealers (ATD) have spoken out against the tariffs, warning of higher vehicle prices, reduced demand, and job losses. The United Auto Workers (UAW) supports the move in hopes that it will lead to more domestic manufacturing. Analysts warn, however, that any long-term gains could be preceded by short-term layoffs.
There are broader economic implications as well. About 1 million U.S.-made vehicles are exported to Canada and Mexico each year. If those countries respond with their own tariffs, U.S. automakers may need to scale back production, cut hours, or reduce staffing.
Despite the challenges, dealerships can take practical steps to adapt:
Tariffs have introduced new challenges for dealerships, but preparation and clear strategy can make a difference. Dealerships that act early and stay informed will be better positioned to manage uncertainty and support their customers through the months ahead. If you have questions about the information outlined above or need assistance with another tax or accounting issue, Wilson Lewis can help. For additional information call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.
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