Bazinga Are Car Prices About to Explode Thanks to Presidential Tariffs!

A Most Disturbing Premise

As a theoretical physicist I find market economics to be...suboptimal. But alas here we are. According to the latest data from Cox Automotive (a name that sounds suspiciously like a law firm specializing in rooster litigation) we are facing a potentially catastrophic (at least for those simpletons who require personal transportation devices) increase in both new AND used car prices. This my friends is what I believe Penny would describe as a 'real problem'.

The Tariff Tussle: A Bumper Sticker of Inefficiency

This impending vehicular value inflation is allegedly due to President Trump's 25% tariffs on imported vehicles. Now I understand the basic principles of protectionism (a concept almost as baffling as string theory). However implementing such measures without considering the downstream effects is akin to playing the theremin with boxing gloves—loud obnoxious and ultimately counterproductive. Cox Automotive projects this will add thousands of dollars to the cost of both imported and domestic vehicles. Preposterous!

Ford and Stellantis to the Rescue? Or Just a Temporary Glitch in the Matrix?

Some manufacturers like Ford and Stellantis (formerly Chrysler because apparently naming things is harder than understanding quantum entanglement) are offering temporary employee pricing. While this sounds benevolent it's likely a calculated maneuver to mitigate the inevitable consumer backlash. British carmaker Jaguar Land Rover has decided to stop shipments to US sensible. It's like trying to explain the Schrödinger's cat paradox to a golden retriever; ultimately futile.

The Mathematical Mayhem of Price Hikes

Let's delve into the specifics. Cox Automotive estimates a $6,000 increase for imported vehicles and a $3,600 increase for vehicles assembled in the U.S. This coupled with previous tariffs on steel and aluminum (an additional $300 to $500) creates a perfect storm of economic unpleasantness. These are in addition to the steel and aluminum tariffs. As I said before preposterous!

Used Car Apocalypse: Sheldon's Guide to Surviving the Great Vehicle Inflation

While tariffs don't directly affect used car sales the ripples in the new car market are about to cause a tsunami in the pre owned sector. Wholesale used vehicle prices are expected to increase between 2.1% and 2.8%. The average used car was $25,000 back in mid March it is now probably beyond the realms of mortals. What is a theoretical physicist to do? Perhaps I shall invest in a high quality velocipede. That's a bicycle for the uninitiated.

A Silver Lining? (Spoiler Alert: Probably Not)

Apparently this situation is not expected to be as bad as the price increases during the Coronavirus pandemic. Which is comforting in the same way that being stabbed with a butter knife is less painful than being stabbed with a katana. Volatility is predicted. The most important thing to remember is to remain calm. Remember the words of my Meemaw. Or was it Einstein? Nevermind.