Trump’s Tariffs Spark Car-Buying Blitz, But Debt Looms Large

President Trump’s 25% tariffs on auto imports, slammed into gear on April 3, have sent Americans racing to car dealerships in a panic-buying spree, but the financial fallout could be a total wreck, according to Bloomberg. Per the outlet, financial planners are presently drowning in calls from clients desperate to snag new cars before prices soar, even as Trump’s latest directives try to ease the sting by preventing stacked levies. But those who jumped the gun are now staring down years of hefty payments, and with a recession potentially looming, this could spell disaster for many.

Dealerships are apparently riding a purchasing wave fueled by buyers' fear of missing out on a decent deal. Honda’s U.S. sales spiked 13% in March, Nissan’s climbed 10%, and the annualized sales rate hit 17.8 million in March and 17.3 million in April, blowing past 2024’s 16 million, said Bloomberg. Yet, new cars aren’t cheap, with average monthly payments for a new vehicle hitting $734 in March 2025, up approximately 27% since early 2020, according to automotive researcher Edmunds.com and as reported by Bloomberg. With loan rates now averaging around 9% for new vehicles and around 14% for a used roadster, per auto research company Cox Automotive, buys are increasingly stretching to seven-year loans to cope. With 25% now underwater and owing more on trade-ins than they’re worth, it's a risky move since cars bleed value fast.

The debt picture’s grim. Auto loan delinquencies are reportedly creeping up, and repossessions skyrocketed to 2.7 million last year, nearly double 2021’s rate, per the Recovery Database Network. Banks, smelling opportunity, are loosening up, extending loans to subprime buyers, said Cox Automotive. If the economy tanks, buyers could miss payments, torch their credit score, and subsequently lose their wheels.

Not everyone’s doomed, however. Those who budgeted for a new ride might cruise through. But for others, the tariff panic could mean years of regret, especially with cars as depreciating assets, unlike homes or stocks. Planners warn that rushed buyers are locking in debt they can’t handle, with some facing repossession. Or worse.