Automotive pricing trends expected to increase as a result of US tariffs, say industry experts
Experts state that U.S. tariffs on Canadian auto imports will result in increased prices for both new and used cars.
Sean Mactavish, CEO of the used-car marketplace Autozen, explains that prices for some used cars are already escalating as sellers anticipate buyers seeking better deals compared to new vehicles.
“As new car prices rise, individuals turn to used cars, and this surge in demand drives up prices for pre-owned vehicles,” he noted.
Mactavish predicts that consumers are likely to downgrade to used cars or delay major vehicle purchases due to uncertainty and higher prices.
Baris Akyurek, vice-president of insights and intelligence at Autotrader.ca, also anticipates that once the tariffs affect the supply chain, new car prices will increase.
“It’s unavoidable that new car prices will rise,” Akyurek stated.
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He added that the demand for used cars had been increasing for weeks before the new tariffs were put in place as consumers anticipated potential changes.
“We believe that some consumers who wanted to be proactive about these potential price hikes have already made their purchases,” he remarked.
U.S. President Donald Trump has imposed 25 percent tariffs on imported vehicles, with temporary exemptions for parts complying with the Canada-U.S.-Mexico free trade agreement.
Prime Minister Mark Carney has announced retaliatory tariffs on cars entering the U.S.
Leaders in the auto industry have warned that the tariffs will result in plant closures. Stellantis has already temporarily halted operations at its Windsor, Ont., plant.
Plant shutdowns will further strain the car supply, leading to higher prices, according to Mactavish.
During the vehicle supply shortage brought on by COVID-19, a similar increase in used car prices occurred, Mactavish pointed out. This time, the price hikes are likely to be particularly concentrated on specific makes and models based on their manufacturing locations.
