Timothy Gill, vice president of research and chief economist for the American Financial Services Association (AFSA), said that new car sales surged in March as buyers attempted to front-run impending tariffs. This statement was made in a newsletter on April 8.
"New cars sales surged in March as buyers attempted to front run impending tariffs," said Gill, Vice President, Research & Chief Economist. "There are reports of temporary pauses in domestic production as well as of shipments being held offshore amid ongoing uncertainty over potential exemptions and trade deals. One certainty is that, in the absence of a significant course correction, auto prices are headed up."
According to the newsletter analysis, new car sales increased by 11% month-over-month in March, reaching a seasonally adjusted annualized rate of 17.8 million units—the highest monthly total since early 2021. Used vehicle retail sales also rose, increasing by 15.5% month-over-month in February to 1.57 million units. Meanwhile, Consumer Price Index data indicated that new vehicle prices slightly declined or remained flat in early 2024, while used vehicle prices climbed for the fourth consecutive month, averaging a 0.9% month-over-month increase.
As per the Financial Times, U.S. car dealerships are preparing for a downturn as President Donald Trump's 25% tariffs on vehicles and parts from Europe, Japan, South Korea, Mexico, and Canada are set to take effect. While showrooms have experienced a surge in sales as customers rush to avoid price hikes, dealers fear a sharp decline afterward. John Crane, CEO of Hawk Auto Group, expects that sales could drop by 20% if manufacturers pass increased costs to consumers. Analysts predict the tariffs could add $4,000–$10,000 to conventional vehicle prices and about $12,000 to electric cars.
In response to the implementation of tariffs on foreign-made vehicles under President Trump, Americans appear to be "panic buying" cars to avoid anticipated price hikes. A Deutsche Bank report noted that March auto sales exceeded expectations and increased from February, suggesting a pre-tariff buying surge. Experts indicate that tariffs will raise prices significantly—by thousands of dollars for regular vehicles and potentially into five figures for luxury models—Investopedia reports.
According to his LinkedIn profile, Gill serves as Vice President of Research and Chief Economist at the AFSA. He brings over 25 years of experience in economic analysis within leading trade associations and holds a Certified Business Economist designation along with advanced degrees in economics from Miami University and John Carroll University.
