Looming Tariffs Caused An April ‘Bank Run’ On Car Dealers

Free IVF, DOGE checks, and a lot of the other stuff Trump said he’d deliver if elected may not be happening, but the tariffs he promised sure are. With ports largely empty and store shelves soon to follow suit, there’s only so much you can do to prepare before everything gets significantly more expensive. One thing Americans have done in droves, though, is buy cars. In fact, the number of people rushing to buy cars last month before tariffs hit basically amounted to a “bank run” at car dealers, Automotive News reports. 

Not every dealer benefited equally, but almost across the board, year-over-year auto sales jumped significantly in April. Toyota saw an 8% increase, while Ford sales were up about 15%, Honda’s were up nearly 17%, Hyundai’s were up nearly 19%, and even Mazda’s sales climbed a full 21%. Subaru, however, appears to be a notable outlier among mainstream automakers, seeing its sales climb only 0.3%. Some luxury automakers saw even larger sales gains than their mainstream counterparts, too, with Lincoln’s year-over-year April sales up a whopping 40%, Acura’s up 33%, and Lexus’s up nearly 24%. Heck, even Volvo saw sales jump more than 5%. 

Automotive analysis firm Motor Intelligence pegged April’s seasonally adjusted, annualized sales rate at 17.3 million sales, which was slightly less than March’s 17.8 million, but that’s still the first back-to-back months with a SAAR higher than 17 million since 2020. 

Ask AutoNews owners Cox Automotive’s chief economist Jonathan Smoke why car sales are up so much, and his answer isn’t surprising: it’s the entirely reasonable fear that tariffs are about to make the cars people want a lot more expensive. “It’s led to a surge in sales as consumers rush to buy before vehicles are completely impacted by the tariffs that have already been announced and gone into play,” Smoke told the audience during an online Automotive Press Association presentation. 

That said, the sales boost was also uneven. It started in late March when Trump first announced automotive tariffs and actually peaked in early April before dropping off later in the month. He also doesn’t see sales getting any better any time soon, saying, “It looks like the market has hit a ceiling, and I would argue that it has, and that ceiling has tight supply and higher prices. Unlike in 2021, the consumer is unable and unwilling to continue buying cars at any price. The industry and the White House are about to get a lesson in what economists call price elasticity.”

Smoke isn’t the only one sounding the alarm, either. As Toyota’s North American boss Dave Christ told AutoNews, “Somewhere around the end of March, there was what amounted to a run on the bank. The first couple days in April was a frenzy, then it slowed to a more normal pace. It could be we pulled forward all the business that was there, because that frenzied pace is not a frenzy anymore.”

If you’ve been thinking seriously about buying a new car soon, the good news is, you haven’t necessarily missed the boat. Dealers may have had great months in April overall, but especially with sales drying up in the latter half of the month, they may be more likely to make a deal. And while it’s hard to tell how bad things will get over the summer, many automakers such as Hyundai, Mini and Volkswagen have announced price guarantees through the end of May to at least give car buyers a little more certainty. 

But while you should still be able to get a decent deal on a vehicle, you may not get to be as picky as you’d like due to limits on inventory. In fact, according to Toyota’s Christ, a lack of inventory is part of what held the automaker back last month. The Japanese car company had an 11.8-day supply at the beginning of April and ended the month with an 11.4-day supply. “So every car that came in went out,” he told AutoNews. “If we had more [vehicles] on the ground, I think we would have sold a little more.”

Subaru, apparently, ran into the same issue, with Troy Poston, Subaru of America’s head of sales, telling AutoNews, “Sales were still strong for April, but we had very low inventory, which was a bit of a hangover from our best-ever sales month of March. That left us with less than a 30-day supply of vehicles and even lower days’ supply on some of our key product lines.”

Very soon, inventory levels could be as bad as they were during the worst of COVID, or perhaps even lower, with prices only going up. “We could easily get back to 2022 levels of days’ supply very soon — and by soon, I mean within the next three to four weeks,” Smoke told AutoNews. “And remember that going forward, all of the inventory refreshes that we see over the next several weeks will be vehicles that are exposed to tariffs.”