Rising Tariffs in the Automotive Sector: What This Means for Customers

The stability of new car prices since 2023 is faltering, at least when looking at potential future price increases. The average prices, which in August 2025 were at a similar level as two years earlier, could come under pressure due to new tariffs. Analysts are already warning of potentially dramatic price developments. Manufacturers face the challenge of absorbing the costs of these tariffs without jeopardizing purchasing willingness through higher final prices. Ivan Drury from Edmunds emphasizes the importance of price for automakers' sales strategy, while Karl Brauer from iSeeCars wonders by what means companies can maintain their margins without financially burdening customers. A growing role is played by so-called destination charges, or delivery fees, which vary from company to company. These fees have increased significantly recently — a development noticeable in the increased average costs of $1,507. The fact that prices of additional packages and higher equipment variants are coming to the forefront shows the strategy of many manufacturers to secure their margins in other ways. Moreover, not only are the costs for new vehicles increasing, but also the prices of spare parts, which demands more attention from car owners for repair costs. Matt Degen from Kelly Blue Book emphasizes that increased costs for spare parts and tariffs on distant countries change the manufacturers' calculations. Another tool in the arsenal of automakers is financial providers like zero-percent financing, which due to increased tariffs and costs is now raised to 3.9%. With a variety of vehicles and varying availability lengths, brands like Lexus and Toyota are trying to manage their backlogs and optimize price controls. Jeep, on the other hand, has a significantly longer lead time for vehicles, which potentially offers more room for negotiation in sales. Finding the right balance is the order of the day for manufacturers and dealers alike to maintain margins while offsetting tariff increases.