Tariffs.

I had to buy a new car recently.

Because the market has not recovered since the pandemic, pre-owned cars are still absurdly expensive.

As is well-known, cars begin to depreciate as soon as you drive them off the dealership lot.

In general, most vehicles depreciate about 40% after the first 5 years. There are exceptions that retain value and have improved resale value. These vehicles tend to depreciate 21-25% over a 5-year period. But they also cost substantially more than other vehicles in the same class (sedan, subcompact SUV, mid-size SUV, etc.)

The vehicle I just acquired was the practical choice. The base model. The point A to point B model. No frills. No frills in 2025 is still pretty fancy TBH. The saddest part was compromising on seating with better back support.

Moving right along…

I was told some insider information, which I actually believe, during my car buying process. The vehicle I bought would likely be $7,000 more if tariffs went into effect. This has been a top conversation at dealerships, which makes sense. In the case of the vehicle I purchased (before taxes and fees), this would have amounted to a 28% increase in price.

Dealerships need to profit in some kind of way in order to operate. No one likes buying a car because it always feels like you’re getting taken at every turn. But this isn’t about “sticker price”. If the vehicles are costing 28% more, then that cost is going to be passed on to the consumer.

Tariff wars have been historically disastrous and countries know (or should) that they are to be avoided at all costs.

We’re going to be hearing more about the 1930 Smoot-Hawley Tariff Act.

Meanwhile, let’s just hope this gets settled quickly instead of further escalation.