Colorado car dealerships work to prevent tariff impacts on consumers
At midnight Tuesday, a 25% tariff on all foreign vehicles kicked in. Canada says it will match tariffs on some cars imported from the United States, and some Colorado consumers.
Many consumers have seen this coming, which led to a massive increase in auto sales.
"You know, I would tell you that, right now, the only pain we're experiencing is the anticipation of pain," said Kevin Shaughnessy, president and CEO of Phil Long Dealerships.
The family of Phil Long Dealerships includes 10 different brands across 16 stores. The brands include everything from Ford to Mercedes to Kia, which means there's more potential ways the tariffs could impact them.
"You got new car sales, used car sales," Shaughnessy said. "You have a parts department; you have a service department, and I think that the impact of the tariffs could vary from department to department, and brand to brand."
Shaughnessy says they've taken a proactive approach by stocking up on inventory.
"Right now, across our different manufacturers, we've got about 3,400 new vehicles on the ground that are all built and invoiced and paid for pre tariffs," Shaughnessy said. "So none of those vehicles will be affected by any tariffs whatsoever. We did the same thing in our parts department. That will ensure that, as we're doing repairs for customers, that the parts that we purchased are not going to be impacted by a tariff. It's entirely possible that parts we buy going forward won't be impacted by a tariff, but we don't know that."
That uncertainty has also impacted buying trends.
"We had the best month in the history of our company -- 80 years -- in the month of March," Shaughnessy said. "So I think that there's a lot of people that are trying to get ahead of this right now, and that's continued the first couple days of April."
"It does not matter what you do to the price of a car," said Matthew Groves, the CEO of Colorado Automobile Dealers Association, which represents every new car dealership in Colorado. "It does not impact a person's need to commute or to get their kids to school, or to grocery shop."
Groves says their national organization is expecting consumers to pay thousands more for a new car.
"They're looking at between $2,000 to $10,000 per vehicle right now, on average," Groves said. "If you think the average car price is about 50,000, that's somewhere between [4%] and 20% of the purchase. That's a big number."
Groves says when new car prices go up, used car prices typically follow. However, auto dealers are doing everything they can to reduce passing down any potential impact onto consumers.
