Philly-area car dealers are bracing for higher prices as tariffs take effect this week

At Ciocca Subaru of Philadelphia, general sales manager Ryan Concord had a message for customers the last Saturday in March:

“Our inventory is here right now, and it’s tariff-free. Come get it.”

The Grays Ferry dealer, which each month sells more than 100 new cars and 60 to 70 used cars, has had a few customers come in looking to buy before prices get impacted, Concord said.

As for the future, Concord said, “we’re concerned. We don’t know exactly how it’s gonna impact business, if it’s going to slow business down.”

The Trump administration is set to impose 25% tariffs on imported auto parts and assembled cars, some of which are planned to go into effect April 3. The move is part of a plan to “protect and strengthen the U.S. automotive sector,” as well as end “unfair trade practices that jeopardize U.S. national security,” the White House has said. The tariffs would encourage U.S. car manufacturing and bring in $100 billion in revenue annually, according to the White House.

Yet industry experts warn that they could drive up the price of both new and used cars, as well as the cost of repairs and insurance, at a time when consumers are already financially strained.

In South Philly, Sarah Haas knows her 2014 Chevy Cruze is getting to the end of its life but has put off looking for a new one.

“I’m riding on pure faith that my car doesn’t break down, just because I don’t want an added expense,” said the 33-year-old. At the same time, “I’m definitely nervous if I don’t pull the trigger soon prices are going to skyrocket.”

Dealers across the region are feeling uncertain in the face of the unknown, said Kevin Mazzucola, executive director of the Auto Dealers Association of Greater Philadelphia, which represents 180 dealers in Philadelphia and Bucks, Chester, Delaware, and Montgomery Counties.

“The market is resilient, but make no mistake, it could be tested,” he said. “You make things more expensive on a product to sell to a consumer, it’s harder for the person selling the product. So it’s not a good scenario for the dealer.”

Ahead of the tariffs, March was a strong month for the auto industry.

In the Philadelphia region, showroom foot traffic started picking up a week or two ago, Mazzucola said. Last weekend was particularly busy, he added, as some consumers pulled the trigger on purchases they would have otherwise made later this spring or summer.

On Saturday in Southwest Philadelphia, a sea of cars was parked at various dealers along Essington Avenue for over half a mile.

Outside Chapman Chevrolet, banners advertised “financing available” and “used trucks.” At the Matt Blatt Chrysler Dodge Jeep Ram dealership, five large RAM pickup trucks in white, red, and black were parked outside the building, and large red bows adorned cars inside the Piazza Honda of Philadelphia’s showroom nearby.

Ross Polinow, general manager of Piazza Honda of Philadelphia, did not want to speculate on the impact of the tariffs going forward. He has seen an increase in business recently, though, describing the last three to four weeks as being “extremely busy.”

“Anecdotally, I’ve heard customers say that they’re concerned about tariffs, so they’re trying to get in under the wire and purchase pre-tariff inventory,” he said.

The Piazza dealership sells both new and used Hondas, and Polinow says he’s not doing anything differently in his business in anticipation of the tariffs.

“We’re just taking every day as it comes,” Polinow said. “It’s a good product. We seem to always rise to the occasion.”

Even industry experts are unsure what comes next.

On Monday in Chester Springs, Sam Fiorani, vice president of AutoForecast Solutions, was still wrapping his head around potential outcomes of this “in flux” situation.

One thing was certain, he said: “Every vehicle sold in the United States will have some sort of direct impact from the tariffs.”

That’s because even American-manufactured vehicles, such as Teslas, get 5% to 30% of its parts from overseas, he said.

Car dealers turn over their inventory every two months on average, Fiorani said, so “by early summer, we’ll have fresh vehicles that are likely to be influenced by the tariffs” on local car lots. But dealers could raise prices sooner, knowing that customers who come in post-tariffs are likely willing to pay a premium, Fiorani added.

Before the end of the year, there could also be shortages of certain vehicle models, ones that become so expensive that manufacturers decide not to bring them into the U.S., Fiorani said. Shortages could also lead to price hikes.

Used-car prices will rise, too, Fiorani said, due to increased demand from people who can no longer afford new cars.

In light of all this, “we fully expect dealers to see a rush on sales, probably from this last weekend [and] going as long as dealers have old stock,” Fiorani said.

If Fiorani were in the market for a car, he said he’d make a purchase as soon as possible.

“The inventory today is relatively tariff-free, and that cannot be guaranteed in a week or two,” Fiorani said. “The best time to buy in the current situation is now.”