Car dealerships and stores are overcrowded with customers buying expensive goods, expecting a sharp price increase due to the imposition of duties. This trend is clearly traced in the reports of automakers, where many companies showed a significant increase in sales.
Hyundai sales increased by 19% to 81,503 cars, which is a record for the brand. Mazda increased sales by 21%, Ford by 16.2%. Kia shows 14% growth, while Subaru only a modest 0.3%.
This leads us to the main question: Did you rush to buy a new or used car to avoid price increases due to duties?
The situation with duties remains unstable, but the current 25% duty on imported cars and parts could lead to an increase in recommended prices by thousands of dollars. Despite this, many companies are still refraining from raising prices.
However, the situation is expected to deteriorate sharply – prices may skyrocket, and some goods may become scarce. As an example, a smart home company recently reported paying $255 thousand in duties for $167 thousand worth of projectors – an amount exceeding the salaries of its founders.
Besides projectors, I myself bought a used car in March, and duty issues certainly influenced my decision. Since duties will make new cars more expensive and rare, the demand for used cars will increase, which will also raise their prices. In fact, the situation may repeat the pandemic chip shortage scenario, when the production of new cars was limited.
Although duties became an important factor and accelerated my decision, the main reason for the purchase was still the need for transportation. What about you? Have you bought a new or used car lately?