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Takeaways
- According to a HarrisX/Allison Worldwide survey conducted in early October, Americans expect that car prices will rise by an average of 14.4% per year.
- The majority of consumers now think it's a bad time to buy a car, and the survey highlighted a drop in the share of people who are "very likely" to buy a new car in the next year.
- “Shoppers don’t just delay purchases, they rethink them completely,” said Rebecca Lindland.
A survey released on Thursday found that fewer Americans plan to buy cars as they expect prices to rise by nearly 15%.
According to a HarrisX and Allison Worldwide survey of 1,760 adults, the majority of consumers believe that it is a bad time to purchase a vehicle. Respondents expect car prices to increase by an average of 14.4% in the next year. 53% also expect interest rates on car loans to rise.
Some consumers have canceled their plans to buy a car due to the prospect of higher prices. The survey found that when asked earlier this month, only 17% of consumers indicated they were “very” likely to buy a car in the next 12 months, down from 21% last February. The number of respondents who believe it's a bad time to buy a car jumped to 56% this month from 46% in the previous survey.
“Shoppers don’t just delay purchases, they rethink them completely,” said Rebecca Lindland.
A Deutsche Bank study on “panic-buying” in March found that some drivers appeared to have rushed into buying cars before tariffs on Mexican or Canadian imports took effect. More than half the cars and trucks imported in 2024 will come from Mexico and Canada. Many of these vehicles are assembled in the US using parts from abroad.
A majority—62%—of Americans are most likely to buy a gas or diesel-powered vehicle, and 71% are likely to select a domestic car, the survey found. Lindland said that the perception of American cars has suffered along with those made in other countries.
Rebecca Lindland is the managing director of Allison Worldwide’s mobility advisory service. She said that consumers are feeling the pinch from tariff uncertainty and inflation. The drop in interest for American-made cars, as well as other automakers, shows that no automaker is immune from the ripple effects.
The Trump Administration has changed its trade policies several times in the last few days. Economists had previously estimated that tariffs would add $2,500 to $10,000 to a car’s price. Price increases may exacerbate affordability issues as delinquency on auto loans continues to rise.
