How will auto tariffs affect car prices and dealerships?

SAN RAFAEL, Calif. - There are now just four shopping days until President Donald Trump's expected whopping 25% tariffs on imported vehicles and vehicle parts take hold on April 3.

Marin Toyota represents the world's largest carmaker with 72 plants worldwide: 12 of those in the U.S. and growing. 

Shoppers prep for tariffs

Shoppers on Saturday felt both pressured and unhappy about imminent tariffs. 

"The car prices have already increased dramatically over the last few years, and I think it's going to make it really hard to get people into a reliable car if they continue to rise," said car shopper Christina Poulakids.

"The reason we're actually here, scoping things out now, is to potentially buy it before that tariff is released," said shopper Matthew Morcaldi.

There is no argument that about half of all cars sold in the U.S. are imports.

"We want to buy an imported car, Toyota, Honda, you know has good reliability and usually domestic cars don't," said shopper Mark Landon.

According to the American International Automobile Dealers Association, last year, some 9,400 dealerships and their 560,000 employees sold almost 8.7 million cars.  

1,000 imported car dealers in CA

Here in the Golden State, there are nearly 1,000 imported car dealers that have 75,000 people working for them who make $7.25 billion a year. A lot of that is at risk.

In 2024, the U.S. International Trade Commission estimated that a 25% tariff would cut the flow of imported vehicles by 75%. That could put a lot of import dealers out of business.

Tariffs could make cars too expensive for many to buy, both imported and domestic.

"You add tariffs, all that's going to do, to the domestic market, is they're going to see an extra 20% that they can make," said Landon.

And, with half of all car parts made abroad, car repairs will have to climb as everything from windshield wipers to transmissions go up in price, again, due to tariffs. 

"I mean I think it fundamentally hurts everyone if you think about it," said Morcaldi.

Many experts say that the tariffs cannot last due to the political fallout, counter tariffs against Americana products and Congressional elections less than two years off.