How Tariffs May Impact New Car Prices

Shoppers looking for a new or used vehicle could soon see higher prices.

Chris Teague | 

Mar 12, 2025 | 2 min read

Ford

More recently, President Trump signed executive actions that delay for nearly one month tariffs on all products from Mexico and Canada that are covered by the USMCA free trade treaty. If enacted, these tariffs could increase new- and used-car prices.

Toyota

Pricing on New Vehicles Will Likely Increase if Tariffs Go Into Effect

A large percentage of both Canada and Mexico's auto exports, including parts and other components, cross the border into the United States. Experts expect the costs incurred as these exports come into the U.S. will be passed down to consumers.

Complicating matters, some vehicles and components cross the borders multiple times, meaning they could incur a tariff at each crossing. While it's possible automakers may absorb some of the additional costs, that effort likely won't be sustainable. Some companies already face razor-thin margins.

While new car prices might not rise 25% to match the tariffs, pricing is expected to increase as a result. Car insurance could become more expensive, as providers realize imported parts will add additional costs to repairs.

Nissan

Used Car Pricing Tends to Reflect New Car Pricing

After years of upheaval following the COVID-19 pandemic, some experts predicted used car pricing would stabilize in 2025. But a jump in prices for new cars will likely impact the entire vehicle market.

A shortage of recently turned-in lease vehicles could further complicate the landscape for shoppers, as long-term disruptions to the leasing market caused by the pandemic are beginning to appear. This situation means a reduction in the availability of late-model used vehicles, which are key to the used car market.

Chrysler

Tariffs Will Impact Some Automakers More Than Others

Automakers with big footprints in Mexico and Canada would be most impacted by tariffs. This includes many mainstream brands.

Despite being "domestic" automakers, Detroit's Big Three have significant operations in each nation. Ford makes the Bronco Sport and Maverick in Mexico, General Motors produces some versions of the Chevrolet Silverado pickup in Mexico, and Stellantis builds the Chrysler Pacifica in Canada.

Honda, Nissan, and Toyota also have manufacturing facilities in Mexico. Nissan builds the Sentra, Versa, and Kicks there, and Toyota also makes some versions of its popular Tacoma in Mexico. In response to the tariffs, Honda has reportedly decided to build its Civic in the U.S. instead of Mexico.

Chris Teague

Chris is a longtime automotive journalist, radio host, and content creator. Before joining Capital One, he covered news for Autoblog, The Drive, and The Truth About Cars. He also co-hosts America on the Road, an automotive radio show airing on more than 500 stations and the American Forces network every Saturday morning. Chris grew up around cars, helping in his family's transmission and body shop businesses, and that lifelong passion shines through in every piece of content he creates.