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The impact of tariffs on the auto sector

There’s been a lot of talk in the media these days around tariffs on goods and services, including cars and the parts that are used to build them. Although there is still uncertainty in terms of how auto tariffs will ultimately play out, the cost of owning and maintaining a vehicle could rise.

As we navigate the potential impact of auto sector tariffs, here are some things to consider that could help you save when it comes to vehicle ownership, including tips on buying cars, repairs and insurance premiums.

What are tariffs and how do they affect me

Let’s start with a basic definition of tariffs. A tariff is essentially a tax imposed by one country on the goods and services they import from another country. A government may impose tariffs for the purposes of raising more revenue, protecting industries within their own country, or to increase their political or economic influence over a country.

When a company is importing goods or services where they must pay a tariff, such as a new car or automobile parts, the cost of the tariff may be passed on to the consumer — and that can mean higher prices.

When you’re planning to buy a new or used car

Since auto sector tariffs could make cars more expensive, you may be looking to buy a used car if there are fewer new vehicles available at an affordable price. Here are some tips when buying a car that could help you in the process.

  • Start by determining what you think you’ll need in your next vehicle. With new innovations in style, safety and technology, you can focus in on the cars that best fit your needs, lifestyle and financial situation.
  • Take your time, shop around and consider different manufacturers, models and options. There’s plenty of competition out there between the different auto makers, and they all want your business.
  • Consider if you want an electric or hybrid vehicle, and factor in that you could save not only on fuel costs but with TD Insurance, you could also save on your car insurance when you go green.
  • Decide if you want to lease or finance your car. If you’re thinking about financing, knowing your options and the associated costs in advance can put you in a stronger bargaining position when it’s time to buy. 
  • Research the trade-in value of your existing car before going to the dealership, and if you’re thinking about buying used, look at their current inventory. The more cars on the lot the higher your negotiating power.
  • Time your visit to the dealership — the best times are usually holiday sales or at the end of the month when they may need to meet quotas. Also, year-end when they’re clearing out previous or discontinued models.
  • When buying a used car, remember to check the Vehicle Identification Number (VIN) to help avoid fraud and ensure that you’re not buying a reVIN’ed vehicle. A vehicle has been ‘re-vinned’ when the VIN number on a stolen car has been replaced with a different VIN to make it appear legitimate.

 

Managing car repair costs

With auto sector tariffs, car parts for repairs may cost more due to supply chain constraints, as they are likely coming from another country. Much of the current repair market relies on imported parts, so tariffs directly impact the cost of owning a vehicle.

As well, cars today have more advanced technology, so they are also costing more to repair given the need for expensive components. To help manage those costs, shop around for a reliable mechanic and compare repair costs. You may be able to get the same work done for less than it would cost if you took it to a dealership. 

However, be mindful that there may be warranty considerations for parts and repairs when manufacturers require that you use an authorized dealer. In the event of an accident, if you are a TD Insurance customer you have exclusive access to our TD Insurance Auto Centers, where you can talk to an on-site Claims Advisor, have your car repaired, and get a rental all under one roof. 

Ways to save on car insurance premiums

Auto sector tariffs mean increased car replacement and repair costs. This will most likely put pressure on insurers to adjust their rates to keep up with the cost of claims. Here are some ways to save with TD Insurance:e process.

Learn more about how premiums are calculated, and factors that could impact your insurance rate. In the current climate of auto tariffs, we’re all trying to save where we can.

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The content on this page is for general information purposes only and does not constitute legal advice. Coverages described herein may be subject to additional eligibility criteria, limitations and exclusions. In the event you make a claim, potential indemnification is also subject to the receivability of the claim and the type of coverage you bought.

In the case of conflict between the content on this page and your policy wordings, your policy wordings shall take precedence.