Trump Tariff Worries Drive Middle-Income Americans To Rush Car Buys: Report

As the uncertainty surrounding Trump tariffs and other policy changes in Washington continues, middle-income Americans are accelerating their car-buying plans, a new survey reveals.

What Happened: A new survey by Santander Holdings USA shows that the majority of middle-income Americans are concerned about rising car prices and the impact of future price uncertainty. Despite these worries, three-quarters of the respondents believe they are on the right financial track, reported Axios on Monday.

“Our research finds consumers are taking proactive steps to secure what matters most, especially autos,” said Betty Jotanovic, president of auto relationships at Santander Consumer USA.

The survey also highlights the significance of vehicle access to families, with many consumers making proactive decisions to secure their transportation needs.

Consumers are keeping a close eye on how uncertainty around future prices might influence their spending decisions. In Q2, 55% said they were considering purchasing a car in the next year, up from 47% in Q1. Additionally, 18% accelerated major purchases due to price concerns, with 41% of those buying a car.

Despite rising prices, consumers appear more eager to make a move—half of potential buyers say they're now more likely to take out an auto loan, 48% are more inclined to buy a used vehicle, and 42% are more likely to complete a purchase within the next three months.

SEE ALSO: Trump’s New EU Trade Deal Labeled ‘Bad News’ By Economists As Dow Futures Spike Over 150 Points

Why It Matters: The surge in car-buying plans among middle-income Americans reflects the impact of the ongoing policy shifts in Washington. This trend is also evident in the used car market, where buyers are facing sticker shock and dealerships are reacting to cash payments in unusual ways.

These changes are occurring against the backdrop of the Trump administration’s $550 billion trade deal with Japan, which some experts argue is essentially a tax increase for American consumers.

The American Automotive Policy Council, representing U.S. automakers like GM (NYSE:GM), Ford (NYSE:F) and Stellantis (NYSE:STLA), has opposed a new trade deal that imposes a 25% tariff on U.S.-made vehicles from Canada and Mexico, while Japan faces only a 15% tariff, thus potentially raising vehicle prices in the U.S..

However, the U.S. Commerce Secretary Howard Lutnick has stated that American auto CEOs are in favor of the new trade agreement.

READ MORE:

• General Motors Delivers Q2 Beat, Braces For Higher Tariff Pressures Ahead

Image via Shutterstock

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.