Americans are heading to dealerships to buy cars ahead of projected price hikes caused by a series of new tariffs affecting the automotive industry, according to new sales data.
“Sales of new vehicles are accelerating as consumers move to buy before the pre-tariff inventory is exhausted,” Smoke said in his most recent Auto Market Report presentation. “Sales for used are up as well, just not as strongly.”
In April, the United States enacted a 25 percent tariff on finished automobiles imported into the country. In May, it will enact a 25 percent duty on automotive parts and components, too. Both changes, along with similar tariffs on steel and aluminum imports, are expected to drive up the prices of automobiles.
Since those tariffs were announced, President Donald Trump and members of his Cabinet have told the press that they are seeking renegotiation of existing trade relationships between the United States and its numerous trade partners. On April 14, Trump told reporters that there may be a pause coming on those automotive tariffs because some nations have shown a willingness to head to the bargaining table. No pause has yet been announced.
Most recently, Trump told reporters on April 17 that his administration is in “no rush” to cut deals. On April 16, Trump hosted Japanese representatives, and Prime Minister Shigeru Ishiba told reporters that the meetings were “candid and constructive.” Japan is home to major automotive exporters, such as Toyota Motor Co., Honda Motor Co., Nissan Motor Corp., and Subaru Corp.
Through the first week of April, new vehicle sales are up by 22 percent compared with this point last year, while used-car sales are up by 12 percent, according to Smoke.
The buying spree pushed new vehicle inventories down, too. New vehicle inventory, Smoke said, was down by about 6 percent compared with 2024. Meanwhile, the number of days new vehicles sat on the lot before selling dropped by 23 percent compared with the prior year.
“The decline ... was one of the largest drops we’ve seen in several years,” Smoke said.
The April 10 report said that in March, dealer inventory, as measured by the number of days’ supply on hand, was lowest for Lexus, Toyota, Honda, and Subaru models.
Cox’s sales lead data indicated that consumers continue to be interested in purchasing new cars. However, Smoke said the sales momentum may dry up as the usually busy tax refund season closes and automotive prices rise.
Cox Automotive provides information and services to automotive consumers and dealerships. It owns Autotrader, Kelley Blue Book, and several other automotive properties.
The car buying spree coincided with an uptick in overall retail spending in March.
Overall, monthly retail sales increased by 1.4 percent in March, the Commerce Department’s Census Bureau said on April 16. That was the largest monthly gain since January 2023. Sales were up by 4.6 percent from March 2024.
Retail spending over the first three months of 2025 jumped by 4.1 percent compared with the same period in 2024. As a sector, motor vehicles and parts sales saw the most significant increase, according to the Census Bureau, with an 8.8 percent rise from March 2024 and a 5.3 percent rise from February.
Americans also broke out their wallets for building materials, garden equipment, and supplies, the report states. Retail sales in that sector rose by 3.3 percent from February and by 2.6 percent from March 2024.
