How Tariffs will Impact Car Buying

In early April, President Donald Trump imposed a 25% tariff on all imported vehicles, with plans to extend similar levies to auto parts in May. These measures aim to bolster U.S. automotive manufacturing by discouraging foreign imports. However, for consumers, particularly those interested in purchasing vehicles from brands like Kia, these tariffs are expected to have significant financial implications.

Impact on Vehicle Prices

Kia, a South Korean automaker, imports a substantial portion of its vehicles to the U.S. In 2024, approximately 60% of Kia’s U.S. sales consisted of imported models. The newly imposed 25% tariff on imported vehicles is projected to increase the prices of these models by several thousand dollars. Estimates suggest that the average price of new cars could rise by $5,000 to $10,000, depending on the vehicle’s origin and manufacturing specifics. This escalation in price may place certain Kia models out of reach for budget-conscious buyers.

Effects on Vehicle Availability

Beyond price hikes, the tariffs may lead to reduced availability of certain Kia models. To mitigate the impact of tariffs, Kia might adjust its U.S. production strategies, potentially focusing on models with higher domestic content. This shift could result in fewer imported models on our dealership lot, limiting consumer choices. Moreover, if Kia opts to absorb some of the tariff costs, it may scale back production of less profitable models, further affecting availability.

Impact on the Used Car Market

As new car prices rise due to tariffs, many consumers may turn to the used car market as a more affordable alternative. This increased demand for used vehicles is likely to drive up prices and reduce inventory. Consequently, buyers seeking pre-owned Kia vehicles may encounter higher prices and limited options.

Long-Term Considerations

The long-term effects of these tariffs on Kia buyers will depend on several factors, including Kia’s ability to adapt its supply chain and production strategies. If Kia successfully increases its U.S. production to mitigate tariff impacts, it may help stabilize prices and availability. However, such adjustments require significant time and investment. In the meantime, consumers may need to navigate a more complex and potentially more expensive automotive market.

Recommendations for Consumers

For those considering purchasing a Kia vehicle, stay informed about the latest pricing and availability updates from us at Kia Country of Charleston. Exploring various financing options and being flexible with model choices may also help mitigate the financial impact of the tariffs. Additionally, keeping an eye on potential policy changes is crucial, as trade policies can evolve, influencing vehicle prices and availability. Even as recently as April 9th, Trump announced he was pausing reciprocal tariffs to countries aside from China, which will be seeing a tariff increase. The situation is constantly evolving with politicians on both sides pushing back against such quick and immediate tariff implementations.