Tariffs on Cars and Parts: What You Need to Know

• What is the reason for tariffs on cars? A White House fact sheet says the tariffs “protect America’s automobile industry.” 
• How will tariffs impact the purchase of a car? Tariffs for new cars priced under $40,000 could impact them by as much as $6,000 per vehicle.
• What do tariffs really mean to Americans? Tariffs mean the federal government levies taxes on cars and some parts coming into the U.S., and those costs typically get passed on to consumers.

If you’re considering buying a new or used vehicle or need to maintain your existing one, you may wonder how the 25% tariffs on imported vehicles and car parts entering the United States will affect your bottom line.

The good news for new car shoppers is that many carmakers stocked up on vehicles in preparation for tax refunds and the spring selling season. It’s not too late to shop for a vehicle before tariffs potentially increase car costs. For used car buyers, prices have remained elevated due to insufficient inventory. Prices could soar higher from new car shoppers flooding the used market to avoid costs that carmakers may pass along to consumers starting as soon as June.

While much still needs sorting, we break down what we know.

• What Is the Reason for Tariffs on Cars?
• How Much Will Tariffs Impact Car Costs?
• How to Tell Where Your Car and Its Parts Are Made
• Costs Could Go Up on Vehicle Maintenance

What Is the Reason for Tariffs on Cars?

According to his administration, President Donald Trump’s tariffs are meant to “protect America’s automobile industry.”

Tariffs affecting car prices came in three waves, and the levies will increase the price of all cars for sale in the market. To date, car tariffs impact imported vehicles, steel, and aluminum. Additionally, on May 3, levies on imported car parts of up to 25% go into effect.

President Trump signed executive orders allowing automakers to avoid levies on imported car parts if they pay the existing levies on car imports from Canada or Mexico, as well as on steel and aluminum. According to a White House fact sheet on tariffs on car parts: “If a manufacturer builds a car in the U.S., that has 85% U.S. or USMCA (United States-Mexico-Canada) content, the manufacturer effectively will not owe tariffs on that vehicle’s production for the first year.” However, on a car built in the U.S., using 50% of U.S. or USMCA content, “the manufacturer effectively only pays on 35% for the first year.” The 25% tariffs on car imports remain in place.

Carmakers build nearly half of all vehicles sold in the U.S. elsewhere. Also, every car built stateside includes many parts from other countries.

“What most American consumers will be surprised by is that traditionally, the domestic brands may not actually be built in the U.S., and traditionally, cars thought of as imports are already built in the U.S.,” said Autotrader executive editor Brian Moody.

Read more on car tariffs.

How Much Will Tariffs Impact Car Costs?

For new cars priced under $40,000, Cox Automotive economists say prices could increase as much as $6,000 per vehicle, including on many of the most popular models.

Many automakers, such as Ford, Hyundai, and Genesis, plan to hold prices steady for May, though car prices could increase in June. Ford extended its employee pricing for consumers until July 4.

How to Tell Where Your Car and Its Parts Are Made

Your 17-digit vehicle identification number (VIN) contains alphanumeric characters to help you decipher key details about where your vehicle was made, its model year, the assembly plant, and more. For information about the origin of parts, check the window sticker on the car you want to purchase.

VIN Decoder: Where a Car Was Manufactured and More

If you know how to decode your car’s VIN, you can determine where a manufacturer assembled it. The vehicle identification number also provides other essential information, like the year the company built your vehicle and the location of the assembly plant. Read more about VIN decoders: Where Is the VIN on a Car?.

Car Window Sticker: How to Tell Where Car Parts Originate

The car parts content information is a bit more confusing. For example, a window sticker from a 2024 Hyundai Tucson SEL shows that 50% of car parts come from the U.S. and Canada, and 15% of “major sources of foreign parts content” come from South Korea. The parts content does not include final assembly, distribution, or other non-parts costs. The Tucson’s final assembly point was in Montgomery, Alabama. Not only will this parts content increase new car prices if automakers pass along the costs, but it could also impact car maintenance. Read on.

Costs Could Go Up for Vehicle Maintenance

Maintaining your vehicle could cost more if tariffs on parts costs, if they get passed on to consumers. Dealership and body shops source imported parts that are exactly like or similar to those originally used to build your vehicle. If you lease a vehicle, contract terms often state that you must maintain the vehicle according to the manufacturer’s specifications. That often means using original manufacturer parts.

Read more about window stickers. Stay abreast of the latest information to determine how pricing affects your purchase and keep your car maintained and operating in top condition.

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