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Car prices going up due to tariffs? What dealers and brands are doing in response

Luke Ramseth, The Detroit News on

Published in Automotive News

President Donald Trump's new 25% automotive tariffs are set to push new car prices thousands of dollars higher, but some automakers and dealers are sending a message that for now, at least, there are still hot deals to be found.

Ford Motor Co. began offering employee pricing to all customers last week, just as the tariffs on new car imports took effect — a move quickly matched by Jeep-maker Stellantis NV. Hyundai Motor Co. pledged it would hold prices level for two months. And others, including General Motors Co., are still advertising substantial incentives and discounts this month, even as average new car selling prices have already begun creeping higher.

The aim, several dealers said this week, is to keep moving their metal at a rapid clip until they can't anymore. So far, customer anxiety over looming tariff price hikes, combined with warmer spring weather and tax refunds, is helping keep showrooms busy in April, following a March where several brands set sales records.

Cox Automotive estimates 1.59 million vehicles sold in March — the highest monthly total in four years, thanks to a surge in purchases at the end of the month as shoppers looked to beat the new import taxes. Consumer fears over tariffs fueled an additional 153,000 new vehicle sales last month, according to Cloud Theory, a data firm that tracks car inventory on dealer websites.

"It's still busy, it's still a spring market," Rhett Ricart, a Columbus, Ohio-area dealer who sells Ford and GM vehicles along with several other brands, said earlier this week. His website advertised his stores' "tariff-free inventory" and urged shoppers: "Get your vehicle before tariffs impact pricing."

Ricart said overall customer traffic at his dealerships has declined slightly since a massive surge starting in late March before the new 25% duties kicked in April 3. But ongoing incentives, including Ford's new employee price offer, are helping keep shopper interest high.

"I think it was a smart move by Ford," Ricart said, adding it had "cut through all the clutter" that shoppers were hearing about new car prices going up. The Dearborn, Michigan, automaker said its "From America, For America" campaign will run through June 2 and translates to savings of about $2,000 to $10,000, depending on model, and the deal can be used in tandem with other existing incentives.

Ed Roberts, chief operations officer of Bozard Ford in St. Augustine, Florida, said the employee pricing offer has helped his dealership maintain momentum that was growing through the end of March. One area that is slowing for the dealership is commercial sales, however, as businesses grow cautious due to current economic uncertainty; Ricart said he's also seen those fleet vehicle buyers pull back in recent weeks.

Ford's employee pricing has "created some urgency" for customers to come in and shop for a vehicle before the deal is gone, Roberts said, adding April could turn out to be one of his best months on record.

Bozard's sales team is fielding lots of questions from shoppers about tariffs and how they will impact pricing. Roberts has coached his employees to respond that the dealership can ensure prices won't rise for the time being, but it can't promise that certain desirable models and trims will still be available a month or two from now. In other words: buy now.

Cox says the industry's average days' supply of new car inventory has already dropped to 70, down from more than 90 a month ago, as sales gathered steam in recent weeks.

Matt Pelc was among the car shoppers who had tariffs and potential price increases on his mind as he began researching new Ford Maverick pickups recently. The 35-year-old was in need of a new car following a recent move from Maui to San Diego, and when Ford announced its employee pricing deal last week, he knew it was time to pounce.

Not only could he avoid tariff-related price hikes on the Mexico-made truck, but he'd automatically get a discount on a popular model that otherwise often sells at or above sticker price. He headed to a local dealership a week ago.

 

“I love the car — it’s exactly what I wanted," said Pelc, adding he got more than $2,000 off a hybrid, all-wheel-drive version of the pickup, thanks to the employee pricing.

Stellantis last week began offering employee discounts, which it says will last through the end of the month, while also idling production at major assembly plants in Mexico and Canada that supply the U.S. market. Vehicles imported from those plants — which include popular Chrysler Pacifica minivans and Jeep Compass crossovers — would be subject to the full 25% tariffs at least until a system is set up to tax them based solely on the value of their foreign-made parts, so the automaker paused assembling and shipping them for now.

Ralph Mahalak Jr., who owns Chrysler Dodge Jeep Ram dealerships in Michigan, Ohio and Florida, said a combination of the recent Stellantis employee pricing offer plus other ongoing incentives and lease deals from the automaker has helped maintain healthy sales at his stores so far in April. March was his best sales month in two to three years.

"I've got some weapons to work with," Mahalak said of various Stellantis discounts, though he added that it appeared some shoppers were staying on the sidelines amid the recent stock market volatility.

Bill Golling, president of a group of Metro Detroit dealerships selling Stellantis vehicles and several other brands, said dealers like him typically carry a 70- to 90-day supply of cars. For now, all he and other retailers can do is focus on marketing those existing cars on the lot that are tariff-free — and continue to attract new customers with employee pricing and other incentives.

He said the Stellantis employee offer was going over well with customers so far this week. But how vehicle pricing will be affected in the longer term is still unclear, Golling said, with automakers mostly holding back on telling dealers concrete details about how pricing will change.

“It’s been, what, a week now?" the dealer said of the 25% tariffs taking effect. "It’s just too soon to judge how all this is going to work out.”

Ivan Drury, director of insights at Edmunds, said it makes sense for both Ford and Stellantis to offer employee pricing because both have relatively large existing tariff-free inventories sitting on dealer lots.

Ford and Lincoln, along with Stellantis' top-selling brands Jeep and Ram, all have much higher inventory than the industry average, according to Edmunds data. Lincoln notably has a glut of inventory sitting on lots, at close to twice the national average. Ford and Stellantis are honoring current vehicle prices for customer orders as well, however, even as some of those cars will be hit with tariffs as they arrive in the country.

Both carmakers also manufacture a significant share of their vehicles in the United States — especially Ford, which builds 80% of the vehicles it sells in the country here — helping insulate them somewhat from tariffs in the longer run, Drury said.

The analyst added that offering such aggressive deals is also effective from a messaging standpoint and buys goodwill from consumers, coming just as most are thinking about prices going up.

"As far as business moves go," Drury said, "it's savvy to say the least."


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