Although President Donald Trump recently announced measures that would soften the blow of tariffs on the auto industry, current tariffs of 25% on imported vehicles into the U.S. will continue. This will likely lead to inflated prices for buyers, as additional costs get tacked on to imported vehicles, which are typically much cheaper than those made in the U.S.
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Here’s a look at how much cars made domestically typically cost compared to those manufactured abroad.
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New Car Prices for US-Made Vehicles vs. Other Countries
A recent report from Cars.com compared the average new car price by country of final assembly. Cars assembled in the U.S. have an average price of roughly $53,000, higher than any other country. Cars assembled in China have an average price of $51,000; cars assembled in Canada have an average price of $46,000; and cars assembled in Mexico have an average price of $40,000.
“The average price for all new cars is about $49,000, so even without tariffs, U.S.-built vehicles already carry a premium — and tariffs may only widen that gap,” said David Greene, an industry analyst with Cars.com.
Greene noted that most budget-friendly cars on the market are manufactured outside the U.S.
“Only three sub-$30,00 models are currently built in the U.S. — the Honda Civic (Greensburg, Indiana), Toyota Corolla (Blue Springs, Mississippi), and the soon-to-be discontinued Chevrolet Malibu (Kansas City, Kansas) — although it’s worth noting that almost half of Civics are imported from Canada, and about a quarter of Corollas come from Japan,” he said.
“With such a limited domestic footprint — and thin profit margins on these models — automakers may follow the same playbook they used during the chip shortage: Prioritize higher-margin trims and scale back or shelve affordable options.”
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Will Tariffs Eventually Drive Down the Cost of US-Made Cars?
Greene does not believe that tariffs will lower the cost of cars made in the U.S.
“It’s a nice idea in theory — build more cars here, control costs better and make new vehicles more affordable for Americans,” he said. “But in reality? That’s not how it works, at least not in the short term.
“Ramping up U.S. production means major investment — building new factories, hiring and training workers, and restructuring supply chains,” Greene continued. “It takes time and money — and automakers aren’t going to absorb those costs. They’ll pass them down, which means prices are more likely to go up before they ever go down.”
How To Avoid Tariff Price Hikes on Cars
It seems inevitable that car prices will increase in the near future, so Greene recommended buying a new car ASAP.
“If car shoppers are even thinking about buying in the next few months, it’s smart to act sooner rather than later,” he said. “Most vehicles currently on dealer lots haven’t been impacted by tariffs, and with around 78 days’ worth of inventory available, shoppers still have a decent shot at finding what they want — at prices that haven’t yet absorbed new import costs.”
However, this window to buy existing new cars won’t stay open for very long, Greene said.
“As tariff-impacted vehicles start to arrive, prices are likely to rise — even on cars assembled in the U.S.,” he said. “That’s because most vehicles built here still rely heavily on globally sourced parts. According to Cars.com’s latest Industry Insights Report, more than half of U.S.-assembled vehicles include significant imported content, meaning cost increases won’t be limited to foreign-made models.”
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Sources
Cars.com, “Industry Insights Report (Q1 2025)”
This article originally appeared on GOBankingRates.com: Here’s How Much Cars Made in the US Cost Compared to Mexico, Canada and China
