Tom Maoli, owner of a new and used car dealership in New Jersey, said drivers could see a big price hike if President Donald Trump follows through on his threat to impose 25% tariffs on Mexico and Canada.
"Every dealer will raise car prices," Maoli said.
"Parts come from all over the world," he added.
The average price of a new passenger vehicle in the U.S. in December was $49,740, according to Kelly Blue Blook.
While Maoli speculates that if the tariffs are implemented, prices for new cars could increase anywhere from 5% to up to 15%.
With higher prices for new cars, prices for used vehicles would also increase due to increased demand, reports Telegraph.
It is known that some of the largest car brands, including Ford, General Motors and Stellantis, have factories in Mexico and Canada.
And according to Maoli, more than half of the parts – such as batteries and engine components – for cars assembled in U.S. manufacturing plants are sourced elsewhere and could also be hit with tariffs, especially with the president proposing new tariffs on China as well.
“I think the producer has no choice but to pass it on to the consumer, because they have to make a profit,” Maoli said.
But that's not all. Repair costs can also increase.
"These brakes come from China," Maoli said.
"Some of them come from Mexico. And their price can increase by up to 20%," the American added.
This means that even if drivers choose to keep their current vehicle instead of buying a new one, they could still be affected.
Alternatively, tariffs may encourage manufacturers to create jobs in the US, but this is not something companies can do overnight. /Telegraph/
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