As President Trump’s trade war continues to influence markets, including the automobile industry, many consumers are reacting by purchasing cars before anticipated price hikes from tariffs take effect.
In Colorado, new vehicle registrations surged by over 10 percent from January through March compared to the previous year, according to the Colorado Automobile Dealers Association.
With the Colorado Auto Show currently underway in Denver, Ryan Warner from CPR engaged with Matthew Groves, the head of the Colorado Automobile Dealers Association, to explore what shoppers need to know when visiting showrooms.
Warner expressed a cautious sentiment, noting his decision to keep his old vehicle instead of buying a new one amid looming tariffs.
In response, Groves outlined two distinct consumer behaviors: some customers share Warner’s conservative approach, prioritizing savings by holding onto their vehicles, while others quickly sought purchases to secure better prices before the March 31 deadline.
The end of March recorded robust sales figures, revealing a near depletion of dealer inventories ahead of the auto show’s opening.
Groves indicated that dealers are eager to assist shoppers in navigating the current market challenges, which include tariffs, high interest rates, and limited inventories.
For consumers wanting to avoid hefty tariff impacts, Groves advised asking specific questions regarding car pricing and components, explaining that the automotive supply chain is complex and highly globalized.
He emphasized that prices can vary significantly by manufacturer and model, as different vehicles might source their parts from various locations, leading to varying impacts of tariffs.
Groves further explained that consumers’ perceptions of cars as purely domestic or international are misleading; instead, the reality is much more intricate due to the global supply chain.
Referring to the rising technological complexity of vehicles, he noted that this increases the number of components sourced from various countries.
Warner pointed out that some consumers are beginning to gravitate towards contactless buying methods, such as apps and online sales.
Groves acknowledged this trend but highlighted the distinct differences between the direct-to-consumer sales approach and traditional dealership models.
While Amazon-style models may appeal to some, he noted, purchasing a car involves different considerations.
Dealerships still provide the flexibility, variety, and immediate availability that many customers desire, especially as franchise dealers have seen an impressive 110 percent increase in electric vehicle sales this quarter, in contrast to a decline in direct-to-consumer sales.
As Warner noted, the Colorado Auto Show isn’t geared towards direct transactions but instead focuses on educating consumers and showcasing products.
Groves mentioned that while product experts occupy the show floor, conversations about sales and financing lead back to actual dealerships, which is fundamental for consumers wanting to ensure they can test drive and finance their vehicles appropriately.
Shifting gears to what’s trending at the auto show, Groves enthusiastically highlighted some exciting new models, including Cadillac’s fully electric lineup and the luxurious Escalade IQ.
In addition to showcasing new cars, Groves shared insight into the used car market, noting that it typically mirrors trends from the new car market about 30 days later.
As tariffs drive prices higher for new vehicles, demand often shifts to used cars, which subsequently see price increases as well.
Groves emphasized that the critical factor affecting consumer choices remains price, with buyers showing willingness to invest more despite rising costs.
With the used car market continuously evolving, Groves expects consumers to seek certified pre-owned and low-mileage used vehicles as financial constraints increase.
In Colorado, where the terrain and weather favor trucks and SUVs, these vehicle types dominate the market, making up about 85 percent of sales, including crossovers such as the RAV4.
While some might expect a shift toward more economical options, Groves predicts that outdoor lifestyle preferences will continue to drive demand for larger vehicles.
Finally, as discussions around tariffs continue to cast a shadow over the auto industry, Groves reflected on the challenges of hosting the auto show in this environment, suggesting that despite the complexities, engagement with customers remains a high priority.
image source from：https://www.cpr.org/2025/04/18/what-to-know-colorado-auto-show-tariffs-buying-a-car/
