U.S. car buyers should prepare for rising prices and fewer vehicle options as President Donald Trump's newly announced 25% tariffs on auto imports take effect, industry experts warn. While the administration claims the tariffs will stimulate domestic production, automakers are expected to offset costs through price hikes, feature reductions, and potentially discontinuing budget-friendly models.

"Most automakers can't simply absorb a 25% tariff," said Andy Palmer, former CEO of Aston Martin. "They will pass on as much of the cost as possible—either by raising prices or stripping features to maintain affordability."

Consumers shopping for entry-level models may find their options shrinking, as many of these vehicles are imported and could become too expensive to remain viable in the U.S. market. Affordable bestsellers such as the Honda CR-V, Chevy Trax, and Subaru Forester may be among the hardest hit.

Industry forecasts paint a concerning picture: S&P Global Mobility predicts annual U.S. vehicle sales could drop from 16 million in 2024 to between 14.5 million and 15 million in the coming years. Cox Automotive estimates that tariffs could add around $3,000 to the cost of U.S.-made vehicles and up to $6,000 for those imported from Canada or Mexico without exemptions.

Despite a current surplus of inventory, dealerships are already witnessing a surge in customers rushing to buy before prices climb. Eric Mann, a sales manager at a Michigan Jeep dealership, noted an increase in buyers motivated by tariff concerns. Michigan resident Jeron Reed, finalizing a lease on a 2025 Equinox EV, said, “Prices are already high, and now they’re expected to jump even more.”

While luxury brands like Ferrari and Bentley can more easily transfer costs to consumers, mainstream automakers with thinner profit margins face tougher decisions. Some may wait to see if tariffs are temporary, while others could relocate production—a costly process that could take years.

For newer automakers like INEOS Automotive, which sells most of its off-road Grenadier models in the U.S., the tariffs present a major challenge. "We can’t simply pass a 25% price increase onto consumers, but we also can’t absorb it all," said CEO Lynn Calder, adding that the burden will be shared among manufacturers, dealers, and buyers alike.

As the auto industry braces for the fallout, consumers may soon find themselves paying more for less—fewer features, fewer models, and fewer affordable choices.