US vehicle supply falls as shoppers panic-buy cars to avoid Trump’s auto tariffs

The supply of new and used vehicles filling US lots is dwindling as customers race to buy cars before President Trump’s tariffs send costs soaring.

By early April, the average days’ supply – which measures inventory by how long it would take to sell – for new vehicles across the country had rapidly shrunk, down to just 70 from 91 days in March, according to a Cox Automotive analysis. That figure typically shifts about five to seven days from month to month — not 21 days.

“The decline in [new] days’ supply was one of the largest drops we’ve seen in several years,” Jonathan Smoke, Cox’s chief economist, said in an update to the report on Tuesday.

Inventory slipped to levels not seen since 2023, with supply in April dipping to 10 days lower than the year before, according to the report.

New vehicle sales are happening 22% above last year’s seasonally-adjusted pace, Smoke said. And the the logistics firm estimated used vehicle sales are “up sharply” as well, roughly 7% higher so far this year compared to 2024.

“Tariffs led to a surge in March sales, reducing inventory levels, especially for manufacturers with already low stock levels,” Cox Auto analysts said in the release.

“As a result of these tariffs and the tightening inventory, and without a policy change in Washington, consumers should anticipate higher prices and fewer discounts on new vehicles by summer.”

Trump slapped vehicle imports with a 25% tariff on April 3, with a tax on auto parts to follow in early May.

Since major automakers – including those with significant manufacturing in the US – rely heavily on parts from other countries, the duties threaten to send costs soaring across the industry, which could be passed along to consumers in the form of higher vehicle prices.

Car dealerships across the country saw a spike in customers in March as Americans tried to beat the cost crush.

As of March 31, the total supply of new vehicles on lots across the US totaled 2.69 million, down 10.2% from 2.99 million units at the start of March, according to the Cox Auto analysis. That figure is down 2.4% from the same time last year.

Several mainstream automakers saw their supplies shrink significantly. Lincoln, for example, felt its days’ supply fall by 54 days, according to the report.

Trump recently signaled he might temporarily exempt the auto industry from his trade war, similarly to how he lowered harsher rates on most nations to 10% for 90 days as negotiations take place.

“I’m looking at something to help some of the car companies with it,” Trump told reporters in the Oval Office on Monday.

He said automakers need time to shift their production from Canada, Mexico and other places to the US. 

“And they need a little bit of time because they’re going to make them here, but they need a little bit of time. So I’m talking about things like that.”

If the auto tariffs stay in place, however, companies should expect a continued decline in production and sales, which will lead to higher prices for both new and used cars, Cox Auto analysts said.

In the meantime, automakers have been ramping up production efforts in the US as they seek to appease Trump and escape the import taxes.

General Motors, for example, has increased output of pickup trucks at its Indiana facility, and canceled previously announced downtime at a factory in Tennessee.

On the flip side, Stellantis, which owns Jeep, Ram and Chrysler, temporarily laid off 900 US employees as it implemented a production pause.

Ford Motor and Stellantis have also knocked new vehicle prices down with special deals meant to woo tariff-wary customers.