New Tariffs Will Add $1,760 to Car Prices in the U.S.—Here’s How That Affects You

If you’re planning to buy a new car in the United States, brace yourself—tariffs are about to make things a lot more expensive. A new study from AlixPartners reveals that up to 80% of new U.S. auto tariffs will be passed directly to consumers, translating to an average increase of $1,760 per vehicle. While some automakers are holding off on raising prices—at least for now—the automotive market is entering a new era of cost and uncertainty.

How Tariffs Are Already Hitting Automakers and Buyers

U.S. car buyers are not the only ones feeling the heat. GM and Ford have sounded the alarm about how deeply the tariffs will impact their operations:

• GM estimates a $5 billion hit in 2024 alone.
• Ford projects $2.5 billion in losses from tariff-related costs.

As a result, Ford has already begun adjusting pricing on models produced in Mexico, including popular vehicles such as:

• Ford Maverick
• Bronco Sport
• Mustang Mach-E

Price increases for these models could reach up to $2,000, according to internal communications and early dealership pricing reports.

Impact on Car Sales and the Broader Market

Beyond rising prices, car sales volume is expected to decline, with AlixPartners predicting 1 million fewer vehicles will be sold in the U.S. over the next three years. The economic uncertainty created by these new tariffs is expected to shake both consumer confidence and dealer inventories.

A Temporary Tariff Wall? Hope for Future Relief

Despite the grim short-term outlook, AlixPartners believes the tariff impact may not last forever. The firm projects:

This optimism hinges on new international trade deals, which the U.S. government may pursue in an effort to stabilize prices and rebuild automotive competitiveness.

Read Also : Auto Loan Delinquencies Surge as 1 in 20 Americans Fall Behind on Payments

What This Means for Electric Vehicles (EVs)

One of the most concerning long-term effects may be on the electric vehicle (EV) market. The Trump administration’s proposed rollback of EV tax subsidies—combined with tariffs—could significantly dampen EV demand in the coming years.

AlixPartners has slashed its EV forecast dramatically:

This means EVs may shift from a mainstream adoption path to a niche market segment, unless the political and economic environment changes direction.

Long-Term Shifts in Consumer Behavior

With car prices rising and government incentives shrinking, American consumers may rethink how and when they buy vehicles. Expect a potential surge in:

• Used car demand
• Longer vehicle ownership cycles
• Increased interest in hybrids over full EVs
• Greater reliance on dealer incentives and leasing offers

These changes will force automakers to retool their strategies, especially for entry-level and family-focused vehicles.

Expert Take: “The Tariff Wall Won’t Last Forever”

Mark Wakefield, AlixPartners‘ global auto market lead, remains cautiously optimistic:

“The tariff wall is not likely to last forever.”

However, as long as the tariffs stand, consumers will bear the brunt of policy decisions, while manufacturers juggle cost control, production logistics, and product development roadmaps.

Conclusion: Buyers Beware—The Road Just Got More Expensive

With new tariffs in place and major changes to EV incentives looming, U.S. car buyers are entering a more expensive and uncertain era. From GM to Ford, and from luxury EVs to compact crossovers, no segment will be left untouched.

If you’re shopping for a new vehicle, now may be the time to buy—before more price hikes hit. But if you’re betting on prices falling with new trade deals, be prepared to wait—and watch the industry pivot in real-time.