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When President Trump unveiled his tariff plans on cars and car parts in April, he said, “you’re going to see prices go down.” Unfortunately, the reality is different. A new study from Cars.com on dealer inventory in the first half of 2025 indicates that the supply of new cars under $30,000 is slowing down.
The study notes that the under-$30,000 segment is the most exposed to tariffs, as 92% of the models within it are imports. Just two, the Honda Civic and Toyota Corolla, are built in the US, and even then, some Corolla and Civic variants come from outside the US. In terms of dealer inventory, the segment saw 3.9% growth year over year (YoY), but that lags behind the 5.6% overall increase YoY for new-car inventory.
The study also shows that dealers stocked up on inventory before tariffs began in April, and sales increased in March and April, up by 3.9% YoY compared to the first half of 2024. This has had a few interesting effects. There was a greater supply of used vehicles as a result of trade-ins from customers looking to get into a new car before the tariffs hit, and those cars started selling quickly. Used car prices dipped slightly in the first quarter of 2025 but rose by 1.6% YoY in the second quarter.
Now, the supply of pre-tariff new cars is dwindling, and with that, the study says we should expect price increases. So far this year, average new-car prices rose by just $97, but…
Source Domain:www.motor1.com
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title_words_as_hashtags:#Tariffs #Killing #Cars #Study
title_words_as_slug:tariffs-are-already-killing-new-cars-under-30000-study
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