EXPERT ARTICLE
Don’t wait for tariffs to hit the lot before you build your plan
Brian Kramer
EVP, Dealer Growth & Success
Cars Commerce
Navigating the tariff tightrope: control what you can, and prepare for what you can’t
Washington, D.C. might light the fuse — but your lot doesn’t have to explode. Let’s not sugarcoat it: we’re staring down the barrel of new-car tariffs (25% on all imported cars) that could upend the market faster than a 30-day-old CR-V at auction. While D.C. does what D.C. does, we’re the ones left holding the keys — literally and figuratively.
Here’s the cold, hard truth: you can’t control politics. But you better control your lot, your lanes, and your local market strategy.
Consumers are paying attention and feeling the pressure. Many are looking to buy as soon as possible to avoid added tariff costs, while others are paying very close attention to where cars are being manufactured.
Check out Cars.com’s American-Made Index to see if and where your OEM’s models rank among the top 100 most American-made, as well as our car buying guide for consumers navigating tariffs. You can use these authoritative resources with your team and customers to better position your store.
First, let’s talk about the incoming punch to the jaw: tariffs
They’re real. They’re here. And they’re about to scramble supply chains like Sunday morning eggs. Winners and losers are going to be obvious — if you know what to look for. Some brands are built for tariff turbulence. Others? Not so much.
Winners & Losers by Vehicle Type:
- EVs (Short-Term): Battery tariffs = buyer hesitation. Expect a temporary stall in the EV parade. Manage EV supply tightly as this market can shift on a dime and you don’t want to be caught holding the bag.
- Trucks & Full-size SUVs: Say hello to the Margin Monsters. These will get even hotter. Stock wisely, or miss out.
- Compact SUVs & Crossovers: Watch auction prices spike like espresso at NADA.
- Hybrids: The “I’m kinda green but not too green” buyer is back. Tariff-squeezed EVs make hybrids a rational hero, and double down on hybrids and plug-ins if the EV tax credit gets repealed.
- Luxury Sedans: Meh. The depreciation curve is still a cliff.
Understand the four tariff categories
To avoid mispricing vehicles or being caught flat-footed on inventory exposure, understand which vehicles are the most and least American-made and align your acquisition plan accordingly. Industry leaders are categorizing tariffs in the following way*:
Category 1:
0% Tariff
U.S.-assembled w/ all USMCA parts
- These new units will be least affected by vehicle production and pricing. Keep the pedal down, and accelerate sales.
- Late model used vehicle acquisitions in this category will also be least affected by potential used vehicle market volatility and pricing fluctuations.
Category 2:
5-15% Tariff
Partial U.S. content with foreign components
- Monitor margins and adjust pricing quickly.
Category 3:
25% Tariff
Assembled outside North America
- Avoid overcommitting. These vehicles should command a higher margin, due to imminent price increases.
Category 4:
Parts Tariffs (10-25%)
Engines, EV batteries, semiconductors
- Service & Parts departments will feel this fast. Develop communication strategies now for customers.
- Accurate reconditioning estimates during vehicle appraisals are critical to avoid unnecessary losses due to estimate errors, lack of availability with OEM and aftermarket parts, etc.
*Senator Bernie Moreno, Auto Tariff Categorization, CBT News, March 28, 2025
Okay, so what do you do about it?
Let’s quit pretending we’re surprised and start making money off this mess. Control what’s in your wheelhouse. And, stop panicking. This is not the time for status-quo strategies or “wait and see” mindsets. This is the time for precision, aggression, and zero room for fluff.
Here are 6 tips to help you navigate the turbulence:
1 Manage your inventory like a pro
- Target <30 unit day supply. Ideal <28.
- Reduce the auction addiction. Max 30% of your used inventory should be sourced from auctions.
- FOMO stocking is how dealers end up explaining negative equity again.
- Stock what moves with the “right” inventory, and resist filling your inventory with used units that are unable to produce a reasonable margin.
2 Diversify your acquisition strategy
- Previous rental vehicles and auction-sourced units may be easy to source, but they present significantly less margin opportunity than consumer-sourced used vehicles.
- Scale up direct-from-consumer used vehicle acquisition.
- Implement and maximize your service drive acquisition strategy. Focus on buying vehicles from service clients first – before trying to sell them something.
- Expand sourcing radius with social media and online sourcing strategies with online tools like AccuTrade.
3 Get ruthlessly data-driven
- Use tools that actually track market adjustments in real-time, not just provide lag measure sales data from 45 days ago.
- Real-time pricing. Regional demand. Appraisal accuracy. This is not the time to wing it.
- If your gut is still your primary acquisition strategy… good luck!
4 Don’t fall for the dangerous lie of the 45-day lookback
- Most acquisition / appraisal tools are looking too far in the rearview mirror at 45 days.
- The last 10–14 days of sales velocity aren’t even showing up yet in most dashboards—especially in appraisal tools that lag behind market action.
- Real-time appraisal data has never been more important than it is right now. Dealers cannot afford to wait weeks for auction averages to catch up to real-time.
- If your metrics are stale, so are your decisions. Make sure that your appraisal acquisition tool includes ALL used vehicles in its competitive datasets.
- Don’t get caught underpricing desirable inventory with a fast turn or overpaying for the wrong inventory, due to an appraisal tool that can’t keep up with the speed of today.
- Remember: “You won’t lose profit because the market adjusted. You will lose profit because your process didn’t.”
5 Get real clear about what’s American-made on your lot
- “American made” has become a marketing weapon – use it wisely.
- Determine which vehicles ARE American made, to avoid risk avoidance and increase sales velocity on the units that will not be affected at all by tariffs
- Determine which vehicles ARE NOT American made, to maximize profitability on those units. These units should receive minimal discounts.
- Communicate the Cars.com American-Made Index to all dealership associates. Post copies at Sales Desk, Parts Department, Service Department(s). And if eligible, turn it into a Why Buy with free creative in your marketing.
6 Define a strategy to play offense, not defense
- Build your plan now. There is definitely uncertainty, stay focused on what is certain so far.
- Use the Cars.com American-Made Index to determine which models at your dealership are affected, and which tariff category your new vehicle models fall into (1-4). Develop a pricing and stocking strategy for each tariff category.
- Communicate with your sales managers to protect front-end margin on Category 3 vehicles. Discounting should be minimal, or zero in this category.
- Don’t wait until the announcement drops to start scrambling.
Bottom line
Washington’s going to Washington. You, however, can do better. Control the controllables. Outsmart your competition. Prep now, or get priced out later. If this turns into chaos, make sure you’re the one profiting from it — not the one complaining in a 20 Group three months from now.
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