Panic buying and canceled orders as car dealers brace for tariffs

Matthew Bomagat’s car couldn’t have been stolen at a worse time.

The Honda disappeared from the streets of Oakland in early March, just before President Donald Trump’s 25% tariff on imported cars was set to hit, likely spiking prices. On Monday, Bomagat was one of many who were rushing to buy before it was too late.

“When I heard about the new tariffs, I decided to start looking,” Bomagat said outside the Lexus of Marin dealership.

Employees at four Bay Area car dealerships told The Standard sales were up since Trump’s announcement last week of the tax on imported cars. But the effect hasn’t been the same for all dealerships. Some luxury car sellers stand to lose millions as customers threaten to cancel planned purchases.

The tariff will take effect Thursday.

“It’s definitely going to have an impact on sales,” said Lana Abukweik, general manager of San Francisco Exotic Cars in San Rafael. “It’s scary.”

At the Lexus dealership in Marin, Tim, 66, who declined to share his last name, said he has been thinking about getting a new car for a while.

“We’re moving faster now because of the tariffs,” he said.

Sales manager Christian Vela said Monday the dealership had just had its best weekend in its 20 years, selling 41 new and used cars between Friday and Saturday. Typically, it sells around 20, he said. He estimates that 70% of customers asked about the tariffs.

“They say, ‘I heard about tariffs, so I’m looking at buying today,’” Vela said.

At BMW San Francisco on South Van Ness Avenue, sales director Rod Helaire also said the threat of tariffs had brought customers through the door, with March sales roughly 40% higher than average monthly sales. He said the dealership typically sells 300 cars a month, roughly two-thirds of them pre-owned.

“We’re selling more because of the imminent tariffs,” Helaire said.

Nationwide, Hyundai saw a 13% sales increase in March compared with a year earlier, The New York Times reported. Ford Motor Company said Monday sales rose 19% in March from the same period in 2024.

Dealers also issued more than twice as many new car loans in March than they did in the same month last year: 1,031 vs. 466, according to Patelco Credit Union data.

But others are backing out of plans to buy luxury cars.

Abukweik, of San Francisco Exotic Cars, said five customers have indicated they may cancel purchases over concerns that the tariffs will cause prices to skyrocket. She declined to say which brands those customers were interested in. The dealership sells cars from Lamborghini, Pagani, Bentley, and Maserati. If the customers do back out, the loss could be enormous: “About $3 million,” Abukweik said.

San Francisco Exotic Cars typically makes 25 to 30 sales per month, she added, so five lost sales represent a significant portion of revenue.

At Porsche San Francisco, an employee who declined to be named because he wasn’t authorized to speak with the media said five customers have threatened to cancel purchases of 911s because of the tariffs. 

The sports cars sell for $150,000 to $250,000. 

Some high-end cars, including Porsche 911s and Bentleys, are built to order and then shipped from Europe, not purchased off the dealer’s lot. This leaves customers vulnerable to a severe hike even after their car has been specified at a certain price because tariffs are levied at the port upon arrival. Abukweik said her dealership has gotten at least 10 emails from customers asking if their car has arrived in the U.S. yet.

A Porsche rep said in an email that the company was not aware of customer threats to cancel purchases.

Dealership employees say they don’t yet know how exactly the tariffs will affect car prices, saying that will be up to the manufacturers.

Meanwhile, used car prices appear poised to increase amid rising demand, according to Cox Automotive.

The Atlanta-based automotive services provider, which runs Autotrader and Kelley Blue Book, said the two subsidiary websites have seen a 30% increase in activity since Trump announced the tariffs. 

The company said traffic on its website Dealer.com, which is used by thousands of dealerships nationwide, has spiked 20%. Customers have been focusing on new cars, but there has also been a smaller uptick in interest for used cars. Dealer websites have seen between two and four times more interest in imported brands versus domestic ones, the company said.

Cox estimates that Americans will pay $3,000 more for U.S.-made vehicles as automakers spread the cost of tariffs across their domestic and imported fleets, Reuters reported. Vehicles made in Canada and Mexico could cost an additional $6,000.

The lack of transparency in how manufacturers will react, including whether they will absorb any of the tariff or pass the full cost onto customers, is worrisome for local dealerships.

Representatives of local Mercedes, BMW, Lamborghini, and Audi dealerships said in emails that they are still assessing the potential impact of the tariffs and declined to comment on how they might affect car prices, production, or sales. Audi went further, criticizing the taxes on imported cars as having “negative consequences for growth and prosperity in the U.S. and other economic areas.”

Porsche’s San Francisco dealership is already operating on a thin line, according to the employee, netting a profit of 6%-8% on car sales. Passing on the tariff to customers is out of the question, especially for a $200,000 car, the employee said.

“We can’t just pass 25% onto a customer. Everyone would say no,” he said.