Tariff Watch
Tariff Updates:
3/21/2025
- The administration’s one-month delay on tariffs affecting vehicles and parts from Canada and Mexico is expiring, and all indications are that they will take effect on April 2nd.
- At this time, most manufacturers have not taken an official position on how they will address potential price increases or whether production may shift back to the U.S. Meanwhile, dealership supply remains high at 89 days on average for February, with OEMs indicating a short-term surplus in the market. However, industry projections estimate that these tariffs could add up to $12,000 to the average vehicle price over time.
- Additionally, our upfitting partners are beginning to indicate potential cost increases between 5-10%, driven by tariffs on imports from China and raw materials sourced from Canada and Mexico.
What This Means for You
Given the anticipated cost increases, we strongly recommend placing orders now to secure current pricing and help mitigate financial impact to your fleet.
3/4/2025
New tariffs are introducing cost volatility that will impact vehicle prices, parts availability, and supply chains. While the administration has temporarily suspended tariffs on the automotive industry, this delay adds another layer of uncertainty, making it even more important for fleet operators to stay informed and proactive.
If implemented, the tariffs could drive up costs for critical vehicle components, affecting both imported and U.S.-assembled models. Here’s what you need to know:
Rising Vehicle Costs
- Higher prices for new vehicles are likely due to increased costs of imported components like batteries, semiconductors, and electronics
- Even U.S.-assembled vehicles are likely to see price hikes due to reliance on foreign parts
Tighter Used Vehicle Market
- Demand for used vehicles is likely to increase as companies seek cost-effective alternatives
- Reduced availability may drive up prices, making procurement more challenging
Increased Maintenance & Repair Costs
- Higher prices for replacement parts are expected to impact service and repair expenses
- Potential delays in parts availability, could lead to longer vehicle downtime
Insurance Premium Increases
- Rising vehicle values could result in higher insurance costs
- Increased repair costs may lead to higher claims and policy adjustments
We’re Here to Help You Stay Ahead
With tariffs in flux, it’s important to stay proactive in navigating these changes by keeping a close eye on pricing trends and reviewing your procurement strategies with your Merchants representative.
Keep an eye on your inbox for ongoing insights to help you manage these challenges, and if you have any questions or would like to discuss the potential impact on your fleet, please reach out.
