What A 25 Percent Tariff Would Mean On A Car Purchase

 

To enlarge, click on the image.

Earlier this week Trump delayed placing a tariff on vehicles and/or parts being sourced from our allies: Canada and Mexico. As the President of Ford Motor Company, Jim Farley, stated last month, any tariffs will be passed along to the consumer. And Farley echos the sentiments of most automakers. Essentially tariffs are an added tax.

The above image represents the Monroney Sticker of a 2025 GMC Sierra 1500 truck. The highly contented truck, which is being built in Mexico, is being imported to the United States.  

Before the tariff kicks in, the vehicle lists for a whopping $87,935.00. Since the vehicle is being imported from Mexico, tack on a 25 percent tariff. This additional tax increase literally drives the price of the truck up by $21,987.00. Thus, the total cost of the vehicle after the Trump imposed tariff rises to an eye-popping $109,920. 

Is this what the American public voted for when they elected this current administration? Currently, the average transaction price of a new vehicle is hovering around $49,000. We can only imagine what the transaction prices will skyrocket to once the tariffs go into effect. This will also place additional pressure on used vehicle prices, too, as consumers look for cheaper alternatives.  

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