Though there is now a 90-day pause on “reciprocal” tariffs, except those imposed on China, the markets are still in flux over the tariff back-and-forth.
For some folks who were in the market for a new car, many are wondering, is this really the time to buy? And if so, do you buy an import or domestic? And what is considered a domestic car under these threatened tariffs?
These are questions a whole lot of Texans are looking for answers for and Keith Barry, senior writer and editor specializing in automotives for Consumer Reports, joined Texas Standard with some answers. Listen to the interview above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: The other day I saw some young people in a Buick Envista, which I think is actually less than $30,000. Seemed like a pretty neat car, and I’ve read a lot of reports on it – I’m sure you have as well.
But then come to think of it, I thought, “well, Buick, wow, that’s really smart, buying a new car right before the tariffs kick in.” But it turns out that Envista is made, I believe, in South Korea.
Keith Barry: Correct.
Yeah, so this gives you a sense of the perils and pitfalls for trying to sort of navigate this climate right now. Is this the right time to buy a car and, if so, where do you start?
Well, it’s a really interesting time because I know that some of those so-called reciprocal tariffs are on pause, but the automotive tariffs never went away. And a lot of folks aren’t talking about that. And automakers are scrambling to try and figure out what they’re going to do about these 25 percent tariffs on foreign vehicles and on car parts.
A lot of the specifics aren’t out there. And automakers, some are putting things on pause. Some are pausing imports. Some are keeping prices where they are. Some are saying prices are gonna go up.
So for an individual car buyer, it’s not a great time to buy a car. It’s a good time to fix the car you already have or sit on the sidelines.
I want to ask you about, though, the car parts thing. Of course, as you know, here in Texas, we have a lot of back and forth in the auto industry. There’s a manufacturing plant, I believe Toyota has it, in San Antonio. We get a lot parts from Mexico for the big GM plant up in Arlington as well.
I’m curious – I’ve been told that if the car is manufactured in the United States, whether it carries a Toyota badge or a Chevy badge or what have you, that the consumer will not be responsible for effectively paying for any tariffs, even if the car has a certain amount of foreign-produced material. Is that correct?
Well, there’s a bunch of people sitting behind computers in automaker headquarters right now trying to figure this out, and that’s their full job – is trying to figure out what’s going to cost more. And, you know, there are parts that come from everywhere that come into a car.
So, regardless of where a car is manufactured, though, it’s part of a lineup of other vehicles.
So I love that Buick example you gave earlier. Buick has cars that are made in the U.S., that are made in the USMCA countries, that are made in Korea, that are made China… They all wear a Buick badge. Buick is based in Michigan, but Buick isn’t going to keep the price of one of their cars low and then jack up the prices and the rest.
You know, I think all automakers want to spread out the effects of these increases across their entire line-up. And I think automaker to automaker right now, some of them are saying, “hey, we’re going to keep prices where they are until…” you know, some are saying June, some saying the end of April. Some are saying we’re not gonna import any cars at all until we figure out how much it’s gonna cost.
But I think that the pricing… You know, water finds a level and that’s kind of how things work in the automotive market. You’re not going to have someone who’s gonna sell, under-price their car, when everyone else is going up.
Very interesting. I think a lot of folks are hoping that U.S.-manufactured cars – and those can be domestic brands or obviously imported brands as well – that maybe the smart money would be to go out and buy those right now before everyone starts jacking up their price to reflect the tariffs.
Do you think that that’s an accurate calculation or no?
Well, I think the best thing to do is to not do anything rash or quickly. Don’t buy a car just because there’s a discount on it.
You’re going to want to check things like the reliability ratings in CR, the owner satisfaction rating. Figure out whether a car is actually a good deal, because if a car can save you $1,000 upfront compared to a competitor, but it’s going to cost you $2,000 more over the lifetime that you own it in repair costs or maintenance costs, then that’s not a great deal.
But if you found a car at a dealership that’s at a great price and the manufacturer happens to be saying, “Hey, we’re pausing price increases,” and you’re already ready to buy a car, sure, go ahead and do it. But don’t go out there and say, “oh, you know, I was thinking about buying a car. But I better rush and get it… because the price increases are going to get baked in over time.”
But you don’t want to get stuck with a bad car. There’s no such thing as a good deal in a bad car.
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I’m thinking about the individual who may be listening and thinking, my car is on its last leg. So what do you do? Do you think maybe go the way of a used car or leasing? How would you think about it?
Yeah, I mean, I really feel for folks who are in that situation. I mean, the good news is that if you have a used car that’s actually in pretty decent shape, if prices go up – and we’re not seeing this yet, but fairly soon I expect prices and used cars to increase too – so your trade will go up.
But it’s going to be tough going out there and buying a used car because there just weren’t as many cars made from 2020 to 2023 due to supply shortages. So you can’t go back in time and make more used cars. There’s already pressure on that market.
And as people get pushed from the more expensive new cars to used cars, it’s going to mean that you’re going to have to look for even more things about reliability, about how a car was maintained, because you might get pushed from a car with 50,000 miles to only being able to afford one with 100,000 miles.
A lease, if that makes sense for you, is an interesting idea. It’s normally not the best financial decision purely on numbers, but it can help you sit out and wait. You have a fixed cost every month.
You don’t have anything to trade in in the end, so that’s the downside. But if you want to have that fixed cost and that predictability, a lease is a good way to step away from what’s going on in the volatility.
Sounds to me like I know a winner in all of these scenarios, and that’s going to be the repair shop.
Yeah, I think a lot of folks are gonna have to think twice. Make sure your car has the safety features it needs. Make sure it’s well maintained.
I mean, when I grew up, cars had five digits on the odometer. And I think a lot of listeners remember the same thing. But we hear from our members, “I have 200, 300, 400, 500,000 miles on my car.” And a lot those cars out of Arlington that you mentioned are folks saying that.
But yeah, at the same time, if you’re buying a used car, make sure that you have one that goes the distance and make sure you have that relationship with a trusted mechanic.
Especially as your car gets older, those independent shops can save you some money and they might even know your car better. You know, they work on a little bit of everything, they’re not just trained in the latest stuff. So that’s another way to save money.
Keith, before we let you go, I’m wondering if you feel free enough to name names, maybe a car or two that you have been impressed by that maybe the rest of our listeners haven’t caught on to. Have you spotted any gems out there?
Well, I will say the biggest change that I’ve seen over the past few years has been towards hybrids. You know, I think we all remember that little Prius when it first came out and the little Honda Insight when they first came.
Now we’re finding that hybrids aren’t just saving gas, but they’re also the better driving car. They’re peppier. They’re using the hybrid almost as a little extra oomph to the vehicle. And you get the better fuel economy, they’re more reliable, and they’re fun to drive.
So, you know, don’t sleep on hybrids. Certainly, if you’re looking for something, it might be better to spend some money on one.
