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Home»Automotive»How Tariffs Could Affect Fleet Vehicle Pricing – FleetTakes
Automotive

How Tariffs Could Affect Fleet Vehicle Pricing – FleetTakes

Chris BrownBy Chris BrownMarch 29, 2025No Comments5 Mins Read
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How Tariffs Could Affect Fleet Vehicle Pricing Fleettakes
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Tariffs will affect latest and used pricing, and never only for foreign-made vehicles. But a recession could upend the complete equation. 

They’re finally happening. After two months of test balloons, 25% tariffs on all imported light-duty vehicles will take effect starting April 3. No less than, that is the plan as of two:15 pm EDT on March 28. 

Tariffs on imported automotive parts are coming too, but not until May. (That’s because determining non-U.S. content of auto parts is pretty hard, so we’ll need a brand new government system to make the determination. And that’ll take time.) 

With so many variables in play — exact scope, duration, inventory levels, OEM exposures, dealer behavior — there is no such thing as a single model to forecast actual price increases on the bottom. 

I gathered perspective on how this might play out from the good seminars and conversations on the Conference of Automotive Remarketing two weeks ago and collating public statements from Cox Automotive and S&P Global Mobility. 

A Vehicle Pricing Dilemma 

Analysts are broadly predicting price increases of $3,000 to $6,000 on latest, tariff-affected vehicles. But translating that into Munroney sticker markups won’t be clean, with vehicle-by-vehicle adjustments. 

Take small cars, that are mostly built abroad while SUVs and pickups are in-built the U.S.: It doesn’t make sense for an automaker’s tariff-subjected, foreign-made compact automobile to be priced higher than the identical automaker’s domestic mid-sized sedan. 

Applying the 25% tariff to that imported compact sedan adds $5,000 to a $20,000 automobile, a large jump in relative terms. But on a $50,000 SUV, that very same 25% adds $12,500 — still loads, but that buyer pool has more elasticity. 

As a response, OEMs usually tend to spread price increases across their entire portfolio, including domestically built models, to keep up product hierarchy and sales momentum.

This might have a spill-off effect industrywide — as demand shifts, prices could rise on non-tariffed, domestically built vehicles from other OEMs. 

So fleet and retail pricing could climb across the board, even when you’re buying vehicles in-built North America.

Spreading the Costs

How do automakers balance these forces? They absorb a few of the cost on lower-margin vehicles, raise prices on higher-end models where buyers have more wiggle room, shift production to lower-tariff countries (in the event that they can), and trim features quietly to cut back manufacturing costs.

They might actually cut models entirely if the economics don’t work, as Jonathan Smoke, Cox Automotive’s chief economist, said in Cox’s Q1 market recap this week. 

Used Market: The Ripple Effect Will Hit Fast

Used prices have come down from pandemic highs, but they continue to be well above historical norms. Cox Automotive reported that used retail prices declined in late 2024, but they’re still roughly 27% higher than 2019 levels.

Tariffs on latest vehicles almost actually mean upward pressure on used vehicle prices. Cox now predicts that wholesale values could rise 2.2% to 2.8% this yr. This can help fleets balance ownership costs but will drive continued market uncertainty. 

In accordance with Black Book, the availability of used compact cars was already all the way down to just 39 days in March, the bottom since April 2021. Supply stays the core issue. Lease returns are down, and industrial fleet cycling has slowed. 

Each Cox and S&P project that on this present tariff scenario vehicle production in North America will decrease by 20,000 vehicles per day. A protracted decrease would affect the used market in the identical way that the 2022 supply chain crunch is constricting lease returns today. 

Tariffs on Parts Will Drive Up Repair Costs

Oh yeah, parts. Tariffs on foreign-made components in latest vehicles (engines, transmissions, batteries, sensors, etc.) shall be factored into latest vehicle costs in ways we’ll never see.

Nonetheless, fleets will see higher repair and substitute bills on foreign-made aftermarket parts like substitute fenders, bumpers, sensors, lights, batteries, brakes, windshields, and mirrors.

Many are built from global inputs involving plastics, electronics, and subassemblies from dozens of nations. Establishing origin data at scale shall be complicated. Until then, pricing uncertainty is guaranteed.

A basic bumper tap can trigger a $2,000 repair attributable to sensor damage. Add a parts tariff, and that would double.

Compounding the issue for fleets? Avoiding a fleet refresh will mean higher maintenance bills on aging vehicles. 

And Now, Recession Enters the Chat

Here’s where it gets complicated. If a recession hits (unthinkable in December, very thinkable now), all the pieces we just talked about shall be thrown into flux. 

Demand for brand new and used vehicles will drop, buyers will pull back, credit will tighten, and repossessions and lease returns will increase. So, if tariffs push prices up and a recession pushes demand down, what happens?

It depends. A gentle recession plus a trade war could produce flat or barely elevated prices. With a deep recession, downward pressure wins, and costs fall — even with trade disruption. It’s a tug-of-war. 

So, What Should Fleet Managers Do Now?

Here’s the shortlist:

  • Audit your exposure: How much of your fleet (and your parts supply chain) is reliant on imports? 
  • Consult with your OEM reps: Are your present orders that haven’t yet been delivered price protected? 
  • Lock in any unplanned orders now: When tariffs take effect, pricing could shift overnight. 
  • Model your TCO under different scenarios: Best-case, mid-range, or worst-case. 
  • Watch used supply closely: 1–3-year-old vehicles are holding their values. Is that this the time to sell right into a buoyant wholesale market? If buying used is smart to your fleet, consider pulling the trigger now before the market heats up further.

But Is Clarity Even the Goal?

Everyone thrives on predictability. As painful as tariffs’ effects may be, understanding their scope and duration will allow smart fleet operators to strategize accordingly. 

But is that this the “for certain” time? In his briefing this week announcing the tariffs, Trump said they’re “everlasting” and can remain in place throughout his presidency. Oh, if only we could count on that certainty. 

Essentially the most concerning thought isn’t just the volatility or the pricing pressure. If the market will be moved with a headline alone, clarity won’t be the goal. Uncertainty will be the point. 

This Article First Appeared At www.automotive-fleet.com

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