Trump’s Auto Tariffs Could Make Car Ownership More Expensive
By Wyatte Grantham-Philips
NEW YORK – U.S. President Donald Trump’s plan to impose 25% tariffs on auto imports, set to take effect in early April, could drive up the cost of owning a car, according to industry experts. The tariffs are expected to increase the price of imported vehicles by thousands of dollars, but also to increase prices for car repairs and, eventually, auto insurance.
While these new taxes are introduced to boost domestic manufacturing and generate $100 billion in annual revenue, economists suggest that the tariff will be disruptive to the auto industry’s global supply chain. Dealerships and repair shops may have no choice but to raise prices, meaning higher costs for everyday car maintenance.
How Will Tariffs Affect Car Repairs?
According to Jessica Caldwell, head of insights at Edmunds, higher costs for parts are expected to be passed down to the consumer. “If you are bringing your car to get repaired, chances are, it’s going to have a part that comes from another country,” she said, explaining that the increase brought about by the tariffs will directly impact the price drivers pay.
Trump’s announcement specifically mentioned engines, transmissions, and electrical components, amongst other things. According to Caldwell, automakers may be less willing to absorb the increase on the cost of individual parts, shifting the burden to consumers.
Much of the car repair market relies on imported products. The American Property Casualty Insurance Association reported that approximately 60% of replacement car parts used in U.S. auto shop repairs are imported from Mexico, Canada, and China. According to Skyler Chadwick from Cox Automotive, sourcing and supply vary across different service providers, making it difficult to predict when prices will rise.
Desiree Hill, owner of Crown’s Corner, an auto repair shop in Georgia, claims the tariffs are already affecting her business. A manufacturer canceled an order for a part from Germany because of the tariffs. “I can’t get (the part) anywhere in our country. Period. So that that was very disappointing,” Hill said. She estimates that these tariffs will make repairing the foreign-made cars she works on more challenging. Hill says, “Unfortunately we don’t have a choice but to raise prices if they are raised on us. We can’t take that kind of loss.”
Car repair prices have already been rising for years. Edward Salamy, executive director of the Automotive Body Parts Association, noted that car companies have pushed towards a “monopoly” to limit remedies to manufacturer-only parts, ultimately reducing options for consumers. Tariffs will only amplify the issue.
What About Car Dealerships?
Joshua Allrich, who owns a used car dealership in Atlanta, expressed concern about rising costs while trying to save money for his customers. “It’s going to make things a lot more expensive,” Allrich explained, adding that the tariffs will also impact his business.
Chadwick stated that dealers and other service providers must be as transparent as possible regarding the tariffs as prices rise. He adds that tariffs will impact prices in the reselling market because it will become crucial to service vehicles before selling them.
Some dealerships and repair shops are aiming to stockpile inventory ahead of the tariffs, especially for the parts that are most frequently requested. Many had been anticipating these tariffs and are already dealing with the new steel and aluminum taxes.
Caldwell also noted the risks, saying, “Do you really want to buy a bunch of inventory that you’re going to have to sit and hold on (to) for quite some time?”
How Could Insurance Premiums Be Affected?
As repair costs for accidents involving new parts increase, insurance premiums are also likely headed for a rise. However, Bob Passmore, department vice president of personal lines at the American Property Casualty Insurance Association, believes consumers will see the impact on their insurance bills after 12 to 18 months. The trade association estimates that personal auto insurance claims costs alone could rise between $7 billion and $24 billion annually.
Even if it takes a while to trickle down, these hikes would occur as consumers are already facing increased insurance costs. The Insurance Information Institute estimated that average U.S. auto premiums increased 14% in 2023 and 12% in 2024. Those projections did not account for tariff impacts, which, according to Mark Friedlander, the institute’s senior director of media relations, will drive prices even higher.
Caldwell indicated that increased tariff-related costs are creating a “chain reaction for insurance.” “This is a total ownership cost increase, rather than just a purchase increase.”
AP Business Writer Mae Anderson in New York and Video Journalist Sharon Johnson in Atlanta contributed to this report.
Copyright 2025 The Associated Press. All rights reserved.
