Sweeping new tariffs that could jack up car prices are causing traffic jams in car dealership lots. At Parkway Toyota of Boston in West Roxbury, several people were negotiating their final deal on new vehicles Monday morning.
“The tariffs, the tariffs, the tariffs” is all the customers are talking about, said Michael Colby, one of the managers.
“There are so many unknowns. We are expecting the pricing of all of our vehicles to go up. We don’t know when,” he said. “There is a ton of uncertainty for the dealer and the customer.”
Over the past two weekends, he says their business has doubled and customers are taking less time to buy. Last month on a Friday, Colby says they had 11 people in their showroom and sold two vehicles. Last Friday, 38 people passed through — and 19 vehicles were sold.
It’s a national trend, with car makers reporting huge surges in sales last month ahead of the anticipated tariffs.
“All of those vehicles are price protected as of right now,” Colby said. “So what’s everybody doing? They’re coming in now to get the car, to avoid paying the higher price two, three months from now when the tariffs really go into effect on all our vehicles.”
Though the stated goal of tariffs is to bring back domestic manufacturing jobs, higher tariffs are anticipated to make imported goods more expensive. Importers pay the hefty fees and could pass on those costs to the customer.
Esther Parks has been in the automotive business for more than 25 years and bills herself as a realtor for car buyers, helping them find the car they want and negotiating the deal.
“With this uncertainty, we can’t give them a guarantee for the future. So if they are looking at a car and the dealership has it, they may want to make a conscientious decision now,” said Parks, who owns and manages StressLess Car, an automotive brokerage.
But she warns that customers hoping to find a blockbuster deal may be disappointed. There just aren’t any, she says, since dealerships know that prices will be rising sharply in a few months.
“What this [tariff increase] is going to do is have dealers coming back up with the higher pricing because it’s still going to be cheaper than paying the costs of the tariffs,” she said. “So we’re not seeing discounts as great as they were a few weeks ago.”
Parks expects this is going to have a ripple effect in the used-car marketplace, too.
“Used cars are gonna be harder to get if we’re not buying new cars, and that’s gonna raise the demand because the supply is going to be lessened,” she said. “And that could drive up those prices, just the same as it did during COVID.”
Car dealers admit this is uncharted territory and, if the tariffs are negotiated away, the projections could change just as quickly.
“If all countries said, ‘Hey, we want to strike a deal, no tariffs’ — that would be excellent for everybody,” Colby speculated. “We’ll get through it, just like COVID. We’ll figure it out.”
