Source: Joe Pinsker, The Wall Street Journal
Higher repair and insurance bills await people sticking with current ride
President Trump’s auto tariffs won’t just make buying a car more expensive. They would make simply owning a car more expensive, too.
Levies on imported vehicles stand at 25%, and tariffs of the same size are planned for auto parts in early May.
Although Trump paused certain tariffs on Wednesday, those still in place are expected to raise the prices of a range of products. Tariffs on cars and auto parts in particular would in turn push up the cost of insurance and repairs, analysts said.
Those increases might not be as sharp as the thousands of dollars that tariffs are predicted to add to vehicle prices, but they would reach far more consumers. That means drivers’ best strategy for dodging auto tariffs’ biggest financial impacts—holding on to their existing cars—is about to get more expensive.
Sticking with your current ride is “still going to save you money, but you’re not going to be completely unaffected,” said Brian Moody, executive editor at online marketplace Autotrader.
The costs of car repairs and insurance have already soared 27% and 53%, respectively, during the past three years, far outpacing overall inflation, according to Labor Department data.
The prices of parts that are commonly damaged in collisions, such as hoods, fenders and lights, stand to rise further starting about three months from now, according to Edward Salamy, executive director of the Automotive Body Parts Association, a trade group.
If you already know your car is in need of a repair or maintenance, Moody said it would be wise to get the work done soon, and not just to save money. Tariffs could make some parts harder to come by as producers adjust their output, which would put cars out of commission for longer periods.
When cars cost more and fixing them costs more, insurance companies’ expenses increase, so tariffs are expected to raise auto-insurance premiums as well.
Drivers could see their bills go up in the next 12 to 18 months, said David Sampson, CEO of the American Property Casualty Insurance Association, a trade group.
As premiums increase, analysts recommend shopping around for better deals—evergreen advice, but especially valuable when different insurers might distribute the costs of tariffs among their customers differently.
Those who brave dealers’ lots later this year and drive home in a new car might be confronted with a sneakier cost of ownership.
The value that a vehicle loses over time, known as depreciation, is the biggest cost of owning a new car, according to AAA. The group’s latest tally of new-car drivers’ annual costs put depreciation at an average of $4,680, more than insurance ($1,715) and gasoline ($2,235) combined.
If new-car buyers pay higher prices this year, they run the risk that their cars depreciate more quickly, unless used-car prices jump accordingly in the future. When tariffs raise new-car prices, “there’s no additional value being added,” said Ivan Drury, an analyst at Edmunds, an online car-shopping guide.
The cost of car ownership has already become painful in the past few years. But one area where drivers have gotten a bit of financial relief is at the pump.
The average price of a gallon of gas is $3.21, or 42 cents cheaper than a year ago, according to data from GasBuddy, a gas-price app.
