- Auto sales jumped in March, likely because of tariff concerns.
- Loan applications rose after Trump’s tariff announcement, and inventory at dealerships has slipped.
- Different kinds of businesses, from vehicles to clothing, may increase prices due to tariffs.
Car buyers weren’t waiting around for potential price increases once tariffs took effect.
New advance data showed motor vehicles and parts sales increased 5.3% in March from February and by 8.8% from a year prior.
While some of that could be due to typical car purchases, recent reports and economists suggest people were trying to get ahead of President Donald Trump’s auto tariffs that took effect in April and parts tariffs scheduled to take effect by early May. Consumers could have been concerned over price hikes or low inventory.
Lydia Boussour, senior economist at EY, said this monthly increase in auto sales was the largest jump since January 2023 “as consumers rushed to their dealership to buy cars still available at pre-tariff prices.”
Beyond the new data, reports indicate consumers were making shopping decisions before tariffs kicked in. A Bank of America Institute report found that after Trump announced tariffs on imported vehicles and certain parts on March 26, more of the bank’s customers were applying for auto loans.
Cox Automotive found new vehicle supply has tumbled across the US, suggesting a rush to buy cars.
"The new retail sales pace increased almost every week in February and March, with a strong surge at month-end with the import tariff announcement creating urgency in the final five days of the month," Cox Automotive said.
Electronics and appliance stores as well as grocery stores had small upticks in sales over the month in March. Sales in building materials and garden equipment and supplies dealers rose 3.3%. Those sectors could also see price hikes as a result of the new tariffs.
Ted Rossman, senior industry analyst for Bankrate, said vehicles, furniture, and clothing are likely to become more expensive because of tariffs.
Sales at department stores, furniture and home furnishings stores, and gas stations declined from February. Boussour said the drop at gas stations reflects lower prices.
Have you made a big purchase lately because of tariffs or other economic concerns? Reach out to this reporter at [email protected]