The tariff impact on new vehicles imported to the U.S. probably won’t show up on dealer lots until this summer. But automakers are finding invisible ways to raise some costs for buyers right now.
Automobile review and price comparison site Edmunds said incentives are where dealers are quietly pulling back.
“You’ll stop seeing as many offers for 1.9% financing for 60 months, or maybe there will be less cash back. Instead of $3,000 cash back, it may only be $1,500,” Ivan Drury said. He’s director of insights at Edmunds. “Things of that nature where it might not exactly be the price or the MSRP change, or even the way the dealer displays the price. It is kind of these back-end components to it.”
Another way automakers are raising costs is with destination fees. Those are fees automobile manufacturers charge automobile dealers to deliver vehicles to their lots, and it is a fee that has always been passed on to all buyers — with no room for negotiation.
Edmunds said it has seen some destination fees raised anywhere from an additional $40 to as much as an additional $400.
The destination fee is confusing for most buyers. It is the same per make and model of vehicle, regardless of where it is actually destined for.
“Even if you live in Hawaii or if you live in Minnesota, the destination fee is exactly the same. Even if you live right next to the factory, you will pay the same destination fee as someone who lives in the Aloha State,” Drury said.
For consumers shopping for a new vehicle this year, there are still incentives to be had, and auto dealerships are still negotiating some sales. But Drury said with tariff costs eventually coming to sticker prices this summer, new vehicle buyers may have their best bargaining chip parked in their driveway.
“If you have a vehicle that is now going to be heavily tariffed when it is new, but you are considering buying a vehicle that has little to no tariffs going forward, you might actually be able to score,” Drury said.
Depending on the make, model and year of a vehicle traded in, and same for the new vehicle being purchased, the used vehicle price on a model versus a new one won’t face the potential tariffs costs. The price difference between a vehicle not subject to import tariffs may cause the gap between trade-in value and new vehicle purchase prices to significantly shrink.
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