CHARLOTTE, N.C. (WBTV) – While some of the larger tariffs set to take effect this month have been delayed, a 10% blanket tariff on all imports remains in place and a 25% tariff on automobiles and certain auto parts is already shaking up the auto industry.
Local dealers say that means higher prices are almost certainly on the horizon for both new and used vehicles.
Jim Keffer, owner of Keffer Auto Group, which operates more than a dozen dealerships across the Charlotte area, including brands like Dodge, Jeep, Kia, Mazda, and Volkswagen, says the current environment feels all too familiar.
“I thought that COVID was the once-in-a-lifetime sort of event,” Keffer said. “And it’s a little interesting that here we are dealing with something that could look a lot like that again for customers.”
Keffer emphasized that the volatility is more than just frustrating, it’s making planning nearly impossible.
“We’re dealing with a very dynamic environment. Today’s decisions are good until 4 p.m., Keffer joked. “And then he’s likely to make a new one.”
He said that the President’s decision to pause additional tariffs on Wednesday might mean less immediate pressure for customers, but that the existing tariffs are still cause for concern.
Some manufacturers like Ford, have announced efforts to offset consumer pricing, but Keffer said that doesn’t guarantee stability for dealers who are left to make big financial decisions in the dark.
“You might be writing a blank check effectively for the next batch of cars,” Keffer said. “Do I order the cars or trucks or do I not? It’s very challenging and some big-dollar decisions to be made.”
According to Keffer, most dealerships still have inventory ordered before the tariffs took effect. But when those lots empty, the next wave of vehicles will likely carry higher prices.
Even cars assembled in the U.S. aren’t shielded. Modern vehicles contain thousands of parts from global suppliers and Keffer says there’s no such thing as a “100% American car.”
“A domestic brand like Ford or GM…they all have some level of foreign components,” he said. “So there’s really no way of being able to say, ‘I’ll be safe.‘”
Manufacturers normally operate on around a 10% profit margin, Keffer explained, and dealers earn even less—about 2.5%. A 25% tariff, he says, could make those numbers unsustainable.
“If the average car is $40,000, that’s a $6,000 hit per car,” he said. “I don’t see manufacturers absorbing that long-term.”
As a result, Keffer believes now may be the best time for anyone on the fence to make a purchase. Many manufacturers are offering employee pricing or limited-time guarantees before the tariffs ripple through the supply chain.
“If you really are in the market, then it’s not a bad time to jump in,” Keffer advised. “Some brands have valid offers that make sure the dealer isn’t marking that car up for market considerations.”
Used vehicles aren’t safe from price hikes either. As new car prices rise, consumers may shift to used options, increasing demand and pushing prices higher, just like during the pandemic.
“We saw it happen during COVID,” Keffer said. “As the new car prices went up, so did the used. Dealers are out at auctions trying to buy, and prices get bid up fast.”
But for Keffer, the challenge isn’t just financial, it’s also about leading through uncertainty. He says the key for any business owner is staying calm and looking for opportunities amid the chaos.
“The first thing is: don’t panic,” Keffer said. “There’s always a potential upside. Our job is to find what’s a great deal for our customers and if we do that, the people working with us will come out okay.”
Keffer also emphasized that it’s the manufacturers, not foreign governments, who pay these tariffs. Those costs are built into the sticker price by the time the vehicle reaches the lot.
“This notion that the Chinese or Japanese are going to pay a tariff, it’s just not true,” he explained. “The person importing the vehicle pays it. And that’s the manufacturer. Then they pass it along to us, and we pass it along to the customer.”
With uncertainty looming, both dealers and car buyers are left navigating an unpredictable road ahead. But for now, Keffer says, one thing is clear:
“There will always be an offset somewhere,” he said. “Whether that’s in used cars, leasing, or something else our job is to find it.”
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