Last week, President Donald Trump granted automakers a one-month grace period regarding tariffs on Mexico and Canada.
But that’s not a free pass, and it could mean your next vehicle purchase or car repair is more expensive in the months ahead.
Jason Kraus, vice president of operations for Mike Albert Sales and Leasing, is closely monitoring the tariff developments. He said if the promised tariffs kick in, they won’t impact new cars alone, as used car prices tend to follow the same trajectory.
"As that new price goes a little higher, there's potential that used price could increase as well,” Kraus explained.
Daire Burke, head of Swoop Funding North America, estimates that 40% of the parts used in vehicles sold in the U.S. come from Canada or Mexico.
“Before a car reaches that dealership, parts will have zigzagged across borders five or six times in some cases,” Burke said.
Even with a one-month exemption, Burke said there’s no disputing that costs will be passed on to consumers given the industry’s massive reliance on foreign-made parts.
“It will likely take a very long time for that supply chain to realign, you know, around a sort of a ‘made in America’ strategy,” he said.
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Drivers who own older vehicles won’t be immune to price hikes.
Auto mechanic Jeff Landrum of Ron's Auto Service tells us many parts in his shop are imported from countries like Mexico and China, even for American-made automobiles.
"We've got filters, we've got wiper blades, we've got some brake parts, definitely tires,” Landrum said. “A lot of things we get on a daily basis are from out of the country."
Burke describes it as an ecosystem that “has been built up over decades.” He said finding alternative suppliers is not a solution that happens overnight.
“Almost all of these car manufacturers and other stakeholders in the industry, such as mechanics, are relying on their international supply partners for parts,” he said.
Last week, White House press secretary Karoline Leavitt said Trump told the CEOs of the “Big Three” automakers that they should move operations to the U.S. to avoid long-term expenses from the new tariffs.
The one-month exemption applies to any autos coming through USMCA or the free trade agreement covering North America that Trump negotiated during his first term as president.
With the uncertainty, Kraus recommends that any consumer in the market for a new or used car act sooner rather than later.
"Moving faster would probably be to your advantage,” he said.
That way, you don’t waste your money.
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