Automakers are eating the cost of tariffs — for no…

Tariffs have been costly for the auto industry. Higher taxes on imports like aluminum and steel are pushing up the prices of the materials that go into cars, while tariffs on foreign-made parts and imported vehicles have been as high as 25% since the spring. Even after recent deals struck with Japan and the European Union, tariffs on imports from those countries are still at 15% — far higher than in previous years.

But so far, those costs have not been passed along to consumers.

Data from Kelley Blue Book shows that new vehicle transaction prices — the amount that buyers actually pay — were up 1.2% year-over-year in June. That’s actually a smaller price increase than the 10-year-average increase, meaning that as tariffs kicked in, car prices rose less than they typically do.

“It’s been a little bit surprising, but good for the consumer,” says Erin Keating, executive analyst for Cox Automotive, the parent company of Kelley Blue Book.

Part of the reason is that when tariffs took effect this spring, dealer lots were full of vehicles that had already been imported tariff-free.

Keating says another factor is that as people rushed to buy cars ahead of tariffs, companies seized the moment as a chance to attract new buyers to their brands. By putting off price increases, they could capture more sales.

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