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Key Takeaways
- A new analysis by Deutsche Bank suggests that Americans have been "panic buying" cars to get ahead of tariffs.
- U.S. auto sales in March came in above the bank's estimates and February figures, its analysts wrote.
- Experts in this industry predict that the prices of new and second-hand cars will increase in the coming months. In the meantime, some automakers have launched promotions to sustain demand.
The Trump tariffs may already be changing Americans' car-buying plans.
In a report published on Friday, Deutsche Bank reported that US auto sales rose from February to March, which was higher than analysts expected. This might indicate “panic-buying” as Americans rushed to buy foreign-made cars before the tariffs took effect last Friday.
The analysts stated that they had anticipated higher numbers due a pretariff pull-forward. But "this impact appears far greater than we anticipated,” the report read. Deutsche Bank had expected auto sales to remain strong through June and then fall in the second half.
Experts in the auto industry have warned that President Donald Trump’s tariffs are likely to increase auto prices. Anderson Economic Group estimated last week that price increases for models and manufacturers would be in the thousands and could even reach five figures. Demand for used autos is also expected to increase.
Patrick Anderson, CEO of Anderson, said: “If you’re in the market for new cars and you find one that you like, I recommend you buy it immediately.” “If you own a used vehicle that you depend on, I recommend you maintain it well as you will likely use it longer than you originally planned.”
Experts say that drivers might also hold on to their cars longer than they otherwise would, limiting used vehicle supply.
Some automakers use promotions to maintain demand. Ford (F), announced on Thursday that it will extend employee pricing to everyone and offer deals for home charging. A spokeswoman for Jeep maker Stellantis told Investopedia that the company is offering a similar deal, including a choice between employee pricing and cash incentives.
"We understand that these are uncertain times for many Americans," Ford said on its website.
