Tariffs on New Cars Would Push Consumers to Buy Used, Poll Finds
Looming tariffs on new vehicles would likely cause many consumers to buy a used vehicle instead, according to a recent study by Autolist.com. Forty-one percent of current car shoppers polled said that tariffs on new vehicles would cause them to buy a used vehicle.
This was the most common response by a wide margin, Autolist found. Twenty-two percent of consumers said they were unsure of the impact on their purchase consideration, 15% said they would buy a cheaper new vehicle than they were originally considering, 14% said tariffs wouldn’t change their plans to buy a new vehicle at all and nine percent said tariffs would cause them to delay their purchase altogether.
Autolist polled 1,453 current car shoppers in late July to gauge the impact of potential tariffs on their vehicle purchase. President Donald Trump has repeatedly threatened to impose steep tariffs on foreign-sourced vehicles and components.
In late May, he ordered an investigation into whether auto imports were a threat to national security. A similar probe into steel and aluminum imports in 2017 eventually led to tariffs of 25% and 10%, respectively, on those materials.
Automakers and foreign leaders around the globe have been united and vocal in their opposition to tariffs on new vehicles, which critics say would cut automakers’ profits and cost jobs.
More crucially, tariffs would also have a direct impact on the price of new vehicles, with analysts predicting that the price of new cars could rise by thousands of dollars per vehicle. The U.S. imported nearly a quarter of a trillion dollars of vehicles and vehicle parts in 2016, according to CNBC.
The cost of a compact Nissan Sentra sedan would rise $3,075 (19%) to $19,300. The average price of a compact crossover — the most popular type of vehicle in the U.S. — would rise by nearly $3,000. A Mercedes-Benz GLC luxury crossover would jump 23% to $45,400, according to an analysis by the Peterson Institute for International Economics.
Consumers are bracing for this hit. Sixty-five percent of respondents in the Autolist survey said they expect tariffs to push up the price of new vehicles. Twenty-six percent said they were unsure. Ten percent said they weren’t concerned.
The survey found little optimism that automakers might absorb higher costs and keep new vehicle prices more stable. Less than a third of consumers (29%) believed automakers would do this; 53% said they expected carmakers to pass on the higher costs to consumers while 18% were unsure.
Many consumers also assume that foreign brands will be hit by tariffs more than U.S. brands (General Motors, Ford, and Fiat Chrysler), Autolist found.
Forty-five percent of respondents said they believed that to be the case; 28% said they did not and 27% were unsure. Yet, because all vehicles built in the U.S. source a significant number of their parts from overseas, U.S.-brand vehicles would be just as impacted by tariffs as foreign brands.
View the complete Autolist study at www.autolist.com/news-and-analysis/tariffs-on-new-cars-pushes-consumers-into-used-cars .