With 25% tariffs on imported vehicles and parts now in effect, dealers across the country—and especially in New Jersey—are grappling with the potential fallout. In today’s episode of CBT Now, Laura Perrotta, president of the New Jersey Coalition of Automotive Retailers (NJ CAR), shared how these tariffs are already weighing on consumer affordability and what they could mean for new and used car markets in the months ahead.
Perrotta highlights that affordability is the top concern among New Jersey dealers. The new tariffs are expected to raise vehicle prices, which in turn will affect monthly car payments, insurance rates, and overall consumer spending power. She adds that the cost pressure may push some consumers toward used cars rather than new models.
Many of Perrotta’s members are long-time supporters of President Donald Trump, and have been very supportive of the administration. There’s a sentiment of “patience,” with some dealers seeing the tariffs as a potential negotiating tactic to secure better trade deals. Her dealers are optimistic that Trump’s bold strategy will benefit the U.S. economy and the automotive industry.
Dealers currently have a healthy supply of vehicles—about 3 million new units nationwide, which equates to roughly a three-month supply. However, Perrotta notes concerns that sentiment could change once that inventory is gone and higher-priced, tariff-affected models begin to hit lots. The longer the tariffs stay in place, the more strain will be felt by retailers and consumers alike as affordability shrinks.
Despite the uncertainty, March 2025 marked a powerful month for sales, driven by a mix of tax refunds and buyer urgency ahead of price hikes. Perrotta expects this momentum to continue into spring, especially as consumers rush to purchase before tariffs fully take hold. Dealers reported having 30 to 90 days of inventory, but the situation could shift rapidly.
She predicts an uptick in used vehicle sales as affordability challenges mount but warned that tight inventory from previous years—especially due to reduced new car production during the pandemic—means prices in the used market will likely rise as well.
She acknowledges the possibility of a shift toward domestic vehicle purchases, particularly among Trump supporters. However, she noted the irony that truly “100% domestically made” vehicles don’t exist, given the global nature of modern supply chains. Still, perception matters, and she believes some buyers will now lean harder into American brands.
Even if unit sales drop, dealers may remain profitable—a model proven in 2022, when dealers sold fewer cars but earned more per sale. Fixed operations and service departments may also help buffer any shortfall in new car volume.
“Affordability is the number one pain point right now… Once you get more expensive vehicles, your monthly payments go up, your insurance goes up, and there’s just a squeeze that’s going to come down on consumers.” – Laura Perrotta
