7 mins read 
Key takeaway
- Auto tariffs can make some new cars more expensive.
- Used car prices can rise when shoppers avoid new cars and buy used instead.
- Trade-in values may stay stronger if used-car demand remains high.
- Tariffs do not affect every car the same way.
- If replacing your car is too expensive, refinancing your current auto loan may be worth checking.
New and used cars are still expensive, and tariffs are one reason prices remain under pressure.
In 2025, the U.S. added a 25% tariff on many imported automobiles and certain auto parts. That does not mean every car got 25% more expensive overnight. But it can raise costs for automakers, dealers and shoppers, especially when vehicles or parts come from outside the U.S.
What are auto tariffs?
A tariff is a tax on imported goods. In this case, the tariff applies to many imported vehicles and certain imported auto parts.
For car buyers, the important part is simple: if it costs more to bring a vehicle or part into the U.S., that cost can show up in the price of the car, the cost of repairs or the number of discounts available at the dealer.
Not every vehicle is affected the same way. A car built in the U.S. may still use imported parts. A car built outside the U.S. may be more directly exposed. Automakers can also absorb some of the cost, adjust incentives or raise prices over time.
Are tariffs making new cars more expensive?
Tariffs increase the cost of imported vehicles, parts and materials. That can make it harder for automakers to keep prices down, especially on models with global supply chains.
New-car prices are still elevated. Kelley Blue Book reported that the average transaction price for a new vehicle rose in April 2026 compared with March and was up 1.8% from a year earlier. Price growth has slowed, but affordability is still tight for many shoppers.
That matters because the price of the car is only one part of the monthly payment. Your payment also depends on your down payment, loan term, interest rate, taxes and fees.
Do tariffs affect used car prices?
Yes, but usually indirectly.
Used cars are not imported in the same way as new cars sitting on dealer lots. But tariffs can still affect used-car prices if they push more shoppers away from new cars.
Here’s how that can happen:
- New cars get more expensive.
- Some shoppers decide not to buy new.
- More shoppers look for used cars.
- Higher used-car demand can push used prices up.
Used-car prices have also stayed firm. Manheim’s April 2026 Used Vehicle Value Index showed wholesale used-vehicle prices were down from March but still up 1.8% year over year.
Which cars are most affected by tariffs?
Tariffs may have a bigger effect on:
- Vehicles built outside the U.S.
- Vehicles with a high share of imported parts.
- Cars that rely on imported engines, transmissions or electrical components.
- Models with fewer dealer incentives.
- Vehicles with tight inventory.
But it is not always obvious from the badge on the car. A “domestic” brand can use imported parts. A foreign brand may build some vehicles in the U.S.
Before buying, compare the out-the-door price, incentives, financing offer and total monthly payment, not just the sticker price.
Can tariffs affect your trade-in value?
They can.
If used-car demand rises, your trade-in may hold more value. That can help if you are selling your car or trading it in.
But a stronger trade-in value does not always mean trading in is the right move. If your next car is also more expensive, the gain on your trade-in could get wiped out by the higher purchase price.
Before trading in, check three things:
- Your current payoff amount.
- Your car’s trade-in value.
- The full cost of the next loan.
If your payoff is higher than your car’s value, you may be upside down on your loan.
Should you buy now, wait or keep your current car?
It depends on your current car, your loan and your budget.
Buying now may make sense if you need a car, find a fair price and can get a reasonable loan. Waiting may make sense if your current car is reliable and the next payment would stretch your budget.
Keeping your current car may be the better move if:
- Your car still runs well.
- Your loan balance is manageable.
- Your current payment is cheaper than replacing the car.
- You can lower your payment by refinancing.
Tariff news can make car prices feel unpredictable. But the best decision is still based on your numbers.
Can refinancing help if tariffs make cars more expensive?
Refinancing will not lower car prices. But it may help if your current auto loan payment is too high.
When you refinance, you replace your current loan with a new one. If you qualify for a lower rate or a different loan term, you may be able to lower your monthly payment.
That can be useful if buying another car is too expensive right now.
Refinancing may be worth checking if:
- Your credit has improved.
- Interest rates are lower than when you first financed.
- Your car still qualifies based on age, mileage and loan balance.
- You want to lower your monthly payment without replacing your car.
Just be careful about stretching the loan too long. A longer term can lower the payment but may increase the total interest you pay.
What to do before buying or refinancing
Before making a move, run the numbers.
If you are buying, compare:
- New vs. used prices.
- Dealer incentives.
- Loan rates.
- Loan terms.
- Insurance costs.
- Taxes and fees.
- Expected maintenance.
If you are keeping your car, compare:
- Your current payment.
- Your payoff amount.
- Your current interest rate.
- Your car’s value.
- Your potential refinance offer.
The goal is not just to find the cheapest car. It is to find the option that keeps your total cost manageable.
Bottom line
Auto tariffs can raise costs for new vehicles, certain parts and repairs. They can also affect used-car prices if more shoppers move from new cars to used cars.
That does not mean you need to rush into a purchase. Compare the full cost before buying, trading in or refinancing. If your current car still works and your payment is the problem, refinancing may be cheaper than replacing the car.
FAQs: U.S. tariffs are affecting new and used car values
Are tariffs making cars more expensive?
Yes, tariffs can make some cars more expensive by raising the cost of imported vehicles, auto parts and materials. The impact depends on the vehicle, supply chain, incentives and dealer inventory.
Do tariffs affect used car prices?
Yes, indirectly. If tariffs make new cars more expensive, more shoppers may look at used cars. That extra demand can support higher used-car prices.
Should I buy a used car because of tariffs?
Not automatically. A used car may cost less than a new car, but you still need to compare the loan rate, mileage, repair risk, insurance cost and total monthly payment.
Can tariffs increase repair costs?
They can. If replacement parts are imported or affected by higher material costs, some repairs may become more expensive.
Can refinancing help with higher car costs?
Refinancing will not lower the price of cars, but it may lower your monthly payment or interest rate if you qualify. That can help if replacing your car is too expensive right now.
