Owning A Car Is About to Get Alot More Expensive

By Soben Ung
Tariffs is a tax that a company pays for importing their goods and the fees usually gets passed on to the customers in higher prices.
Trump’s executive order to impose 25% auto tariffs on Mexico and Canada is about the hit the US consumers on May 3. It will affect you in several ways. First the cost of a new car will be more expensive, second, if you get into an accident, your repairs bills will be higher, and third your insurance will be higher.
According to the White House, Americans bought approximately 16 million cars, SUVs, and light trucks in 2024, and 50% of these vehicles were imported.
“The 25% tariff will be applied to imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components), with processes to expand tariffs on additional parts if necessary,” wrote the White House.
Here are the auto makers are affected by the tariffs because their plants are in Mexico and Canada: BMW, Ford, GM, Honda, Kia, Mazda, Nissan, Stellantis, Toyota, Volkswagen and auto part suppliers such Michelin, GM, and Toyota.

For example, GM imported roughly 750,000 cars to the US in 2024, according to a report by the Detroit Free Press. Nissan produced nearly 505,000 vehicles in Mexico, where it has two plants, in the first nine months of 2024. Additionally, Ford has three plants in Mexico. It exported about 196,000 cars to North America, including 90% going to the US in the first half of 2024. Another prime example is Volkswagen has factory in Puebla, Mexico where it made nearly 350,000 cars in 2023, including the Jetta, Tiguan and Taos, all for export to the U.S. And in Canada, Volkswagen is building a battery factory in Ontario, with output to begin by 2027. Volkswagen’s Audi plant in San Jose Chiapa, Mexico is employing more than 5,000 people.
Under the current United States, Mexico-Canada (USMCA) trade agreement, some parts may be exempt from tariffs if they originated from the U.S, otherwise they will be taxed.
The Street reported, “There’s not a lot of clarity around which tariffs are stacked on top of each other,” said Ryan Mandel, director for collision repair company Mitchell International in an interview with Repair Driven News.
While car parts like sheet metal, outer closure components like the hood, fender, quarter panels, doors, and bumper do not fall under the new tariffs, according to Mandel, other parts like copper, ceramics, glass, and plastics sourced globally do.
About 47% of the aluminum used in vehicles is imported, according to Mitchell, and 20% of automotive replacement parts are made of aluminum. You certainly will see a bill higher if you get into a car crash.
Whether buying a new car or keeping your old one, because many parts of the car will also be taxed, it drives up the cost of your vehicle insurance because the cost of repairs and replacement parts go up.