My Prediction For Consumer Behavior and Pre-Tariff Purchases

The U.S. automotive market has experienced a notable surge in sales, with a reported 11% increase in March 2025. This uptick is primarily attributed to consumers expediting their vehicle purchases ahead of the impending 25% tariffs on imported automobiles and parts, set to take effect in early April . Given the current market dynamics and consumer behavior, it is reasonable to anticipate that this elevated sales trend will persist through May.

Consumer Behavior and Pre-Tariff Purchases

The announcement of significant tariffs has led to a sense of urgency among consumers. Fearing imminent price hikes, many are advancing their purchasing decisions to capitalize on current pricing. This behavior is evident in the substantial sales increases reported by major automakers. For instance, General Motors Co. experienced a 17% surge in deliveries during the first quarter, while Hyundai Motor Co. reported a 10% gain, including a 13% jump in March alone .

Impact of Tariffs on Vehicle Pricing

The forthcoming 25% tariffs are projected to raise vehicle prices significantly, with estimates suggesting increases of up to $10,000 for certain models . This anticipated inflation is prompting consumers to act swiftly, further fueling the current sales momentum. Dealerships are also responding by encouraging buyers to finalize purchases before the tariffs take effect, thereby contributing to the surge.

Sustained Sales Momentum Through May

Considering these factors, it is plausible that the heightened sales activity will continue through May. Consumers who are aware of the impending price increases but have not yet acted may still expedite their purchasing decisions in the coming weeks. Additionally, dealerships are likely to continue promoting pre-tariff pricing to attract hesitant buyers, sustaining the sales momentum.

Potential Market Adjustments Post-May

However, it is important to recognize that this surge may be temporary. Once the tariffs are in effect and prices adjust accordingly, a potential decline in sales could occur as consumers react to the higher costs. Analysts predict that vehicle prices could increase by $3,000 to $10,000 per vehicle industry-wide, which may deter potential buyers and lead to a slowdown in sales . Therefore, while the current trend is positive, stakeholders should prepare for possible market adjustments in the latter half of the year.

My Prediction

This 11% jump in automotive sales is no fluke—it’s a calculated response to looming economic policy shifts. I believe this elevated sales pace will hold steady through May as consumers continue racing to secure vehicles before tariff-driven price increases take hold.

However, once tariffs are implemented and prices adjust upward, I expect a bifurcation in the market. Luxury and high-demand models will experience sustained demand, particularly among affluent buyers less impacted by monthly payment sensitivity. On the other end, entry-level and mid-tier vehicle buyers will begin to hesitate, leading to a softening in volume—particularly in the new car market.

Pre-owned vehicles, especially certified and late-model inventory, will become the new battleground for both franchised and independent dealers. Expect used car prices to rise another 5–10% as affordability pushes more consumers into the second-hand market.

My advice to dealers: double down on customer pay service revenue, lock in pre-owned inventory while values are stable, and prepare now for the margin pressure that will follow by mid-summer.

How long will it last?

Short term, I expect an intense 45-day period of volatility and immediate impact. On the long side, we could see extended effects that stretch across 5 to 6 months, depending on how OEMs respond and how consumer demand adjusts.

We’re in for a volatile stretch. Those who adapt early will not only survive—they’ll thrive.