As the clock ticks down to April 3, the date when U.S. president Donald Trump‘s 25 per cent tariffs on all imported vehicles are expected to kick in, economists warn that all new North American cars could soon see a price hike in the thousands of dollars.
How much the price of a certain vehicle may be affected will depend on where it is manufactured, said Charles Bernard, the lead economist at the Canadian Automobile Dealers Association. The cost increases may also be buffered by the remaining inventory of already-made vehicles on the lot, he explained.
There’s still much uncertainty around exactly what will be taxed by the new automotive duties, as well as the economic impact of Trump’s sweeping new tariffs and resumption of his delayed duties on Canada and Mexico come April 2 — what his administration has deemed “Liberation Day.”
Here’s what that means for you.
How much will new North American car prices go up?
That depends on what is getting tariffed.
The current U.S. automobile tariffs will only impact completed cars and light trucks imported into the U.S., noted Erik Johnson, a senior economist specializing in the auto industry and vice president of economics at BMO.
If a vehicle produced in Canada were to be made with U.S. parts, the belief is that vehicle will be tariffed “only on the non-U.S. components in that vehicle,” Brian Kingston, head of the Canadian Vehicle Manufacturers’ Association, previously told the Star.
If these are the only tariffs levied on the auto industry, it’s expected to raise prices by the “low single digit thousands” of dollars per vehicle, Johnson said.
But if additional tariffs come into play targeting USMCA-compliant automotive parts, some of which may cross the border numerous times before assembly (and thus being dinged with each crossing), Johnson predicts new North American-made vehicles could see an average $7,000 price increase per vehicle — although he has seen estimates as high as an extra $10,000 per new automobile.
These prices could increase further if Canada imposed its own retaliatory tariffs on American-assembled vehicles, Bernard added. Prime Minister Mark Carney has already pledged billions in counter tariffs to the U.S. auto tariffs, but has provided scant details on what may be affected.
The automotive industry is already under pressure following Trump’s previous 25 per cent tariffs on steel and aluminum imports. A Ford F-150, for example, was expected to see a price hike of $3,000 due to these mineral tariffs, an expert previously told the Star.
Which brands and models won’t be as affected by tariffs?
Vehicles manufactured outside North America that don’t rely on North American parts aren’t expected to be affected by the tariffs, Johnson and Bernard said.
“Outside of the European luxury brands and plug-in hybrids/EVs from Japanese and South Korean automakers, Hyundai, Kia, and Mitsubishi still assemble a significant chunk of their vehicles abroad,” Johnson said.
You can consult this chart published by the U.S. National Highway Traffic Safety Administration for a full list of all the 2025 vehicle models labelled under the American Automobile Labeling Act, which includes the percentage of their parts manufactured in the U.S. or Canada versus internationally.
Vehicle models like the RAV4, Honda Civic, and CR-V are largely manufactured in Canada, and thus may also be “more insulated from initial price increases than vehicles that are assembled more fully in the United States,” Johnson said. The Star assembled a list of vehicles made in Ontario here.
However, the unfortunate reality is, because the North American auto industry is so interconnected, “what happens in the U.S. as a result of these tariffs will cascade through the entire USMCA region,” Johnson concluded.
When will the price hikes on new cars kick in?
That depends when dealers run out of their remaining inventory of already-built vehicles, the experts said.
“Right now in North America, there’s about three months’ supple of vehicles,” Johnson said — although Bernard notes the excess inventory will differ by dealership and brand.
Consumers will likely see price increases before that three month period is up, however: “If I’m (a dealer) and I see that the next lot of vehicles I’m buying from the manufacturer is more expensive because of that tariff, I’m going to start raising my prices now,” Johnson said.
“So consumers may see prices go up more quickly, and it’s going to vary a lot across brands.”
Is it time to buy a new car in Canada?
That depends on your economic situation.
You will most likely save money by buying a new car now before the price increases are expected to hit, the experts said. But Johnson notes that purchasing a new car is a long-term decision, and may require years of financing: “Buying a car isn’t a one-year kind of decision.”
With more wide-ranging tariffs on the way, Johnson advises households to factor in the potential toll Trump’s trade war might have on their livelihoods — if you work in the manufacturing sector, for example, and your job is at risk, you may want to reconsider making a major purchase, he said.
“But if I was in a situation where I was already going to make a car purchase… this might be a time to pull forward one of those purchases.”
How will used car prices change?
If Trump’s new auto tariffs extend to used vehicles as well as new ones, used car prices are expected to trend downwards in value in Canada, Johnson and Bernard said.
Canada currently exports roughly 300,000 used cars to the U.S. each year, according to Johnson. But Trump’s auto tariffs could make the vehicles more expensive for American consumers, leading more of the supply to remain in the Canadian market.
In this scenario, the sudden excess of supply is expected to drive used car prices down in Canada, Johnson said.
“The USMCA doesn’t distinguish between whether a vehicle is new or used,” Johnson said. “That means those used vehicles are going to face these tariffs in the same way that new vehicles are.”
Bernard, however, is skeptical that used cars will be included in the tariffs, saying Trump’s executive order was unclear whether they will be affected.
If used cars are not included in the tariffs, we may see a repeat of what happened during the COVID-19 pandemic, when new car shortages rocketed up prices, driving up demand for used vehicles — and thus raising used car prices in turn.
