Even in the most logical, predictable market there is no simple answer to the question “What car should I buy?” Beyond personal preference/finances, there are always complicated reasons why one car might be a deal while another one may not be. This is especially interesting when the two cars otherwise seem quite similar.
A great example is the Merkur XR4Ti. This was a RWD sports car with Ford’s Lima turbo four. In theory, it was going to be an affordable competitor to cars from Audi and BMW. That didn’t happen. In fact, by the time the Merkur made it to the United States, it was more expensive than the Mustang SVO with the same motor. Who would take a car from an unknown brand over a Mustang? The Merkur was almost as expensive as the more luxurious Thunderbird Turbo Coupe, which, as another Ford product, had a version of the Lima turbo.
What made the Merkur so expensive? The car was built in Germany, and in between planning the car and selling the car, the Deutsche Mark appreciated considerably relative to the dollar. When you pay to build something in one currency and sell it in another, you generally want to build it in the cheaper currency and sell it in the higher one. This, more than anything, probably doomed the Merkur experiment.
For all the talk of tariffs, this isn’t a bad time to buy a car, unless you want certain cars. I’m going to try to set the stage for what you probably should and shouldn’t buy. A European car? It very much depends on which European car. A Japanese car? Also, what happens if all the non-US companies make a trade bloc against the United States?
‘Don’t Be Scared’ Is The Best Car-Buying Advice
My advice last November was to “buy a car before the next big global trade war” because based on what President Trump said at the time, things seemed to be headed that way. That advice feels like it was correct in retrospect, and I took it myself by buying a car before everything got crazy.
But for all the talk of tariffs, it’s going to result in very different outcomes for different automakers at different times. Here’s the best advice I’ve heard, from an expert in this Detroit Free Press article:
“The price gains everyone is scared of haven’t materialized for consumers yet. So, don’t be scared,” Cox Automotive spokesman Mark Schirmer told the Detroit Free Press. “If inflation starts to return, that means the market will slow down and that means the only thing you can do as an automaker is lower your prices. I imagine (General Motors CEO) Mary Barra and (Ford CEO) Jim Farley are kind of nervous right now.”
According to the latest data, car buying experts at Cox Automotive and Edmunds.com say new vehicle inventory is healthy and, as many buyers remain on the sidelines due to economic jitters, it’s forcing dealers to discount cars at an aggressive pace to move the metal. The experts predict that automakers will soon have to help dealers by offering more national sales programs, and likely, low financing deals, to keep inventory from piling up on lots.
“Uncertainty is keeping folks on the sidelines, but inventory is building back up and (automakers) likely still feel they are in a war for market share, no one wanting to blink first. So if sales continue to plateau, I think we’ll see incentives come back,” Erin Keating, executive analyst at Cox Automotive, told the Free Press.
Don’t get scared, get prepared.
If you’re interested in a Ford, there are certain models that are a decent deal right now. Stellantis has been playing around with employee pricing, and automakers generally have been reticent to raise prices until everyone else does. I assume there will be a tipping point, but it hasn’t happened yet.
The best bet at the moment appears to be American-made cars for the obvious reason that they’re made in America and not directly subject to as many tariffs. American brands are also the safest bet because the less exposure an automaker has to tariffs, the less pressure there is to try to offset tariff prices by raising prices.
Why is that, exactly? It’s simple. If you’re an automaker and 50% of your cars are only impacted by the steel/aluminum tariffs (let’s say it’s a 10% increase in costs), and 50% of your cars are made overseas and subject to a higher, 30% tariff, you can make some of your products way more expensive while keeping the 50% of cars made in the United States cheap. Or, you can just spread the increases over most or all vehicles in order to lessen the impact on any one model.
So, who should we worry about?
Trump Threatens 30% Tariff On Europe And Mexico
I’m going to skip over the Mexican tariff threat from President Trump this weekend simply because it doesn’t seem like this new threat (which may not be real, anyway) will impact cars. Maybe the tariffs will, I don’t know, but for the moment, the auto sector seems to benefit from the existence of the USMCA trade zone formed by the United States-Mexico-Canada Agreement.
European stocks took a hit this morning as the EU doesn’t have the same sort of protection that the USMCA seems to provide automakers.
On Saturday, President Trump threatened to impose a 30% tariff on imports from the European Union and Mexico, effective August 1, after weeks of negotiations with major U.S. trading partners failed to yield comprehensive trade agreements.
“The market is definitely taking the news negatively, but it’s not pricing it in…they are taking this with a pinch of salt and assuming that it’s just the start of a conversation and that over the next few weeks the news flow will gradually improve”, said Michael Field, chief equity market strategist EMEA at Morningstar.
In response, the EU said on Sunday it would extend its suspension of countermeasures to U.S. tariffs until early August and continue to press for a negotiated settlement.
Just like the United States likes to protect its auto workers, so does Germany. While it’s possible that German and Italian automakers could eventually shift more production to this side of the Atlantic, it ain’t gonna happen overnight. If you wanted a European car that’s not built in the USMCA trade zone, I’d maybe get moving on that sooner rather than later.
Japan’s Trade Woes Continue
For whatever reason, President Trump can’t seem to drop his consternation over his perceived trade imbalance with Japan. The President believes, falsely, that Japanese regulators throw bowling balls at American cars to disqualify them. As I mentioned last week, he’s also been concerned about the reluctance on the part of Japanese regulators to allow American agricultural products into the country.
Japanese automakers and suppliers have built numerous plants and facilities in the United States, of course. There’s really know other country I can think of that’s been a better example of post-war trade investment and cooperation than Japan. Which is why this is so confusing.
As Bloomberg points out, Japanese government officials also seem confused:
“They sell us millions and millions of cars a year. We sell them no cars because they won’t accept our cars. And they won’t accept much of our agriculture either,” Trump told reporters in Washington.
Trump announced last week that he will raise across-the-board tariffs on Japan to 25% on Aug. 1, after months of negotiations between Japan’s top negotiator Ryosei Akazawa and Trump’s aides yielded little progress. Bessent, one of the three negotiators leading the US efforts to reach global trade deals, is set to come to Japan to visit the World Expo in Osaka on July 19, but there has been no sign of a trade meeting on the sidelines so far.
Around 80% of Japan’s trade surplus with the US is in cars and car parts, and the country has already been hit by 25% sectoral tariffs on autos. While Trump has repeatedly complained about Japanese consumers not buying US cars, Prime Minister Shigeru Ishiba has said American cars are left-hand drive, large, and fuel inefficient, making them a tough sell in the country.
While Japan does have a history of protectionism with regard to cars, there are currently no tariffs on vehicle imports. Also, I just don’t see the Ram 2500 being a particularly popular vehicle in Japan. If huge tariffs continue to exist there’s only so much production that Japan can shift to the US in the short term and, it’s possible a new government in Japan could decide it doesn’t want to play ball.
What If The Rest Of The World Just Decides To Go It Without America?
The worst possible outcome, short of an actual war of course, is that the intransigence on the part of the United States results in the rest of the world deciding to isolate the US by setting up more bilateral trade without us. I think this is mostly unlikely given that much of the world relies on American products and, conversely, relies on American customers. The rest of the world can’t entirely drop us, but it can weaken the country’s role in the global economy.
The United States has been able to use the dollar as a global currency and has been able to maintain the most control of global trade post-WWII. Given that the “90 deals in 90 days” promise has passed with no signed deals and only a couple of broad outlines of deals, it’s a question worth asking, as this Bloomberg article does:
“We need to explore how far, how deep we can go in the Pacific area with other countries,” EU competition chief Teresa Ribera told Bloomberg TV on Monday from Beijing, where she is visiting for climate-focused talks with Chinese officials. She highlighted the EU’s continuing trade talks with India, which are expected to be completed by year’s end.
The most consequential case is the EU. The bloc is locked in talks with Washington while also forging ahead with existing bilateral talks and weighing new ways that align with the rules-based global trading system, which Trump has vowed to rewire with unilateral measures including tariffs that benefit the US.
“I support the Commission in its efforts to form global partnerships, alliances with other countries that are threatened by US tariffs,” Austrian trade minister Wolfgang Hattmannsdorfer told reporters Monday. “Together we can raise the pressure exerted on the US.”
For what it’s worth, Indonesia made a deal with the EU this weekend. You know who this feels good for? China.
What I’m Listening To While Writing TMD
This Song-of-the-Summer rec comes from David, who has been jamming on Aubrey Hobart’s “Sue Me.” If you’re not familiar, she’s a songwriter who has written a bunch for Gracie Abrams. I like it.
The Big Question
If you could import any car right now what would you import?
Top graphic images: stock.adobe.com; depositphotos.com
With the resurgence in popularity of that Ferris Bueller video clearly outlining Republican tariffs from the 1920s ultimately triggered the Great Depression, I can only hope the EU and other former economic friends of the US go their own way and show us the pain our bad decisions. One very good thing happened with the Great Depression. Americans were so angry at the incompetence of Republicans that it was almost a full generation before they let another one anywhere near the White House. Let’s hope history repeats itself.
The stupid actor in that video somehow forgot the lesson and is a Trumpist now.
Well, he worked for Nixon back in the day, so his judgment was always suspect.
Oh, you sweet summer child. The idea that any prices are going to come down in a high inflation environment is so absurd I’m second-hand embarrassed for him. They might hold the line on pricing for a while, but the shareholders won’t let them eat the tariffs forever.
So true. The only acceptable fix to supply being higher than demand is to reduce production. So prices go up, and available options for consumers go down.
Do I have to pay for it? If yes, then nothing at the moment.
Seems the car market has always been:
I thank you again Matt for yet another concise Morning Dump, including your What I’m Listening To. I know that almost no one seems to listen to terrestrial over-the-air radio anymore (except me, and maybe a few other old farts) but there’s a LA station called KCSN AKA The SoCal Sound at 88.5 FM https://www.thesocalsound.org/ that actually plays a lot of the music you recommend. Of course, they stream online and via a mobile app as well, but it all sounds pretty good on an ’80s Sony receiver hooked up to a roof antenna too. 🙂
This is why I used to love radio. We used mostly XM now, but the only way to get variety is to change the station a lot. I miss being EXPOSED to new music through radio or, if you’re of a very specific generation, MTV’s late-night shows like Headbangers’ Ball, 120 Minutes, and Amp.
Let’s hear it for public radio! Also, if you’re in LA, FM 89.3 digital channel 2 is a broadcast of my favorite public radio station: the Current from Minneapolis/St. Paul (which is 89.3 in the Twin Cities). I suspect that their programming is similar to The SoCal Sound.
I’m luck to have 2 NPR all music stations withing reach here. 1 is roots rock based (WUMB) and the other is jazz (WICN) but they cover a ton more than that with their shows. I have one or the other always on.
Also a shout out to WOMR (Outer Most Radio) from P-town when I visit my Mom on Cape Cod.
If you like the current you should also check out Radio K (KUOM), and KFAI in the twin cities. Both are also available via streaming, the hosts are less polished but the music is pretty good.
I listen to terrestrial quite a bit, I like the variety and I just hits different when they mix in a great track or some new hit I haven’t heard before and I’m not expecting it.
LHD Nissan eNV200, which I’d put a NISMO (by Quaife) 2 way Helical Limited Slip Differential in like I did in my Leaf, then probably turn it into a camper van.
I dunno, it’s a great time to buy off-lease, 3yo luxury cars. 30% depreciation off the top, and lots of under 15k mile cars out there right now. You just have to decide if you feel lucky wrt warranty.
You must be going higher luxury than me, because a 3 year old car with 30,000 miles is only going for 20% off new. I’m not sure that is worth it.
Also, when the 20%-30% discount still leaves you with a $75k+ vehicle, I’m still not calling it a good value.
The sweet spot from my experience is the MSRP range of $60k-80k. Still attainable to most people if they stretch their payments, but also still with bad depreciation to make them affordable to savvier buyers. Toyota and Honda marques are largely excepted here 🙂
I was looking at a Lexus IS, so you are correct.
Let morons have power, get moronic results.
https://electrek.co/2025/07/14/tesla-penis-shaped-robotaxi-expansion-illustrates-unserious-business/
Ketamine, a hell of a drug. Will the next expansion be Depends-shaped?
judging from how brexit turned out to be a 5-year kick in the beans for the british economy, i’ll be betting the under on the u.s. trade war.
I could even see this latest US boorishness being just enough impetus to consider a slow Bre-entry.
I only listen to your songs maybe 20% of the time, but hearing that David suggested this one, I had to. I love music videos like this, but man that looks exhausting for her! She’s got lots of energy there and it’s just so simple but fun. Not my style of music, but she did a great job there!
An Alpine A110, as long as it comes with a warranty. It would be a fun car to drive until Nissan engine explodes or the Getrag DCT gives up the ghost
I leased an Ioniq 5 about a year ago. I just received a $23,412.90 trade-in offer from the dealership in the mail.
I believe the MSRP when I leased it was around $53k. I don’t know how many of these things Hyundai leased out, but that value is way less than the residual value in the lease.
Unless these somehow appreciate in the next two years, Hyundai is going to find themselves in an early 2000s Mitsubishi situation when these things come back to them off-lease. I’m only paying ~$11k of the depreciation and they will be eating the rest.
So I’ve seen similar things happen with the last three leases I had with EVs over the last 8 years. Every time I ended the lease, the lease buyout number was higher than the cost of buying a used 30k miles 3 year old version of the same car. So I never wanted to take the buy-out, it was always a better deal to just start a new lease or buy a used car. Maybe that will not be the case if you ended a lease in a year or two from now without the $7500 reducing the cost of a new lease?
With our EVquinox lease (our first lease and our first EV) the buy-out price on the paperwork is basically what you’d pay to go get a brand new identical vehicle from the dealer today. The way they apply the $7500 tax credit toward the lease payments instead of as a discount on the car results in a number that just doesn’t make sense for a buyout. Would we buy the car at the end of the lease? Maybe, but certainly not at that price. Will they offer a deal in the year when the lease runs out? I guess we’ll see.
I guess they can apply the credit either way, because in my lease they used it to reduce the starting price of the vehicle.
That’s what I figure. We’re pretty happy so far leasing. If we love the car we’ll just buy a similar one at the end. If not we’ll see what deals are around.
Yeah. I think that in about 2 years, the lease returns from the panic lease boom will start to flood the market, and the case for buying a used EV will be pretty strong. My 500e is definitely going back after the lease is up, because I can’t see the $19K buyout being even remotely competitive. I am betting that I will be able to get a much better EV for $19K at that point.
No matter how much they’ll miss us, yes, the rest of the world will just start ignoring us, like an old, loud man in the park screaming at the clouds.
Unfortunately that’s what happens when the old man in the park screaming at clouds is literally elected president
Damn you! You’re right.
Username checks out!
😉
Usually I advise folks to wait until December to double dip on end year, end of quarter sales, especially in any outgoing models.
It’s really a risk tolerance question. Since American cars are least likely to be impacted (or see minimal impact), waiting until December and following that playbook is fine.
If you’re eyeing a European or Japanese car, now would probably be a good time to get ahead of that risk uncertainty. I’m mostly familiar with Toyota/Lexus – relative to them, the Toyota Crown has sold poorly because the new Signia Crown has been cannibalizing sales. If you want a (relative) deal on a Toyota sedan, that’s one to consider.
Slate did a Munro Live over the weekend. Turns out they camped out at his shop for months, watching them disect all the cars and see the pro’s and con’s. I don’t know what Sandy gets out of it, but I’m sure there was some payment for that.
Anyways, the interview left me really feeling much better about getting one in the future. The decisions were made intelligently and everyone was trying to keep it simple, reliable and cheap at every step of the way. Check it out! Maybe Dave T will do a deep dive as they show the entire thing from just a frame to pre-production model.
Got a link?
https://www.youtube.com/watch?v=yGXLhGg7624
Wasn’t sure the policy on posting links!
Thanks! I work for one of the Big 3, so I’ve worked with Munro a lot. Not sure how I missed this.
It sure doesn’t feel simple.
I bought two very low mile used cars last summer, so I’m set for the foreseeable future…..I paid a little more than I thought I should, but they were both in like new condition so I’m ok with them both.
But I’m very concerned about what’s going to happen with a “leader” who can’t make up his mind and might be going to jail yet due to his past transgressions with young girls and a cabinet full of ass kissers who have no minds.
All the Nazi shenanigans Musk did have really hurt Tesla, and I’m also concerned about all the Americans who are getting laid off and have lost their jobs because of him. Not to mention Tesla was a very innovative company who invented lots of cool stuff, both from the products point of view and technology to build those products. I’m concerned that all that is being flushed down the drain in the name of the owner’s idiocy.
Jail? The way he’s going he’ll be wheeled out of the Oval Office straight into memory care.
My son needed a car and he bought a 2025 Nissan Ariya (AWD, lots of extras including their special “northern Lights” paint) for $35K before sales tax (talked them down from $40K – that’s ma boy!). Nissan’s putting $10K on the hood for these and they’re the best EV SUV deal on the market, IMHO. I’m leasing one at the moment and I’ve been seriously impressed by the quality. It’s better in every respect than my Polestar 2, at 1/2 the cost. So yeah, some new car deals can be found, even among non-domestic manufacturers, provided that the cars are already here in-CONUS.
I’d import a Toyota Crown Sport. It looks like a baby Purosangue, it has over 300 horsepower, and it’s a Toyota PHEV so it has good range and still gets hybrid fuel economy when operating as one.
I would imagine that car would be a cruise missile on the Interstate, great for 1,000-mile days.
Fantastic answer right here!
Hey, are you on Discord?? I posted a pic of an Elantra-N with CT license plate:
ENSANE
Immediately thought of you.
I’d import a Suzuki Jimny.
Good choice. This would be near the top of my list as well.
This is the way.
I bought a used vehicle in December. I wasn’t certain which way prices would go, and the only thing I was certain of was uncertainty. I just searched comparable cars, and current prices are just slightly higher than what I paid 7 months ago. I’m fairly confident that I made the right move. But if you don’t need a car, don’t buy a car.
Here’s a few non-sequiturs because I feel like long-form replies are just rants these days.
I still can’t get used to “USMCA” over NAFTA, mainly because it sounds like some kind of mashup song between Skynyrd and the Beastie Boys.
EVERY single time I hear the “bowling ball crash test,” all I can think of is Dazed and Confused.
The EU has more people than the US, but a weaker consumer sector and the burden of bureaucracy to slow down commerce. But yes, if push comes to shove, they could easily become more self-sufficient (without the US or Russia). In many ways, they already are. The sheer about of “EUDM” vehicles is mind-boggling, but it’s apparently working.
Every time I see “USMCA” I think it’s the Marines.
USMCA: The episode of Happy Days where Fonzie joins up!
That’s what Trump liked about the rebrand. Cadet Bone Spurs really likes to steal valor or at least “borrow” it whenever he can.
The shift in recruiting ads was glaring. During Obama, they were about rescuing people and securing our nation.
Then, in 2017, they were about shooting stuff.
Biden brought back rescuing, but now they’re back to shooting stuff.
One quick addendum is that EU expansion is something to consider, as well — if they perceive additional weakness or stonewalling from the US, I could see some of the applications get fast-tracked (Serbia, Albania, etc). Even though these aren’t huge economies, the fact that they introduce even more consumer to the mix and generally raise living standards…that’s just one more erosion of our “competitive advantage” as a nation.
I want America to succeed, but at this point I feel like we’re long overdue for both a cultural and an economic reckoning — something like a 30% drop in housing cost, increased taxes to pay for deferred infrastructure and social program repairs, generally reduced purchasing power, etc. I don’t see a lot of this happening under Trump, but I could see it happening under his successor who will take the blame for a lot of the pain. Collectively, we’ve lost sight of our priorities and thought money could fix everything…and now we’re f*cking with money, too.
We don’t always agree politically, but in this I do have to agree. A reckoning does in fact seem due. It coming after the current administration has filled the holes in the dyke with toothpaste and bubble gum would not surprise me at all. I am one of the lucky ones who has seen obscene equity growth in my home since Covid, but its so absurd, I would be willing to accept a large diminishment of that equity if it made the whole market more reasonable.
I didn’t realize I was politically disagreeable 🙂
Same idea for me, but with investments more than home equity. And these days, I think both are equally tenuous so I’m not sure what the next moves are.
My personal arc has been pretty Libertarian 20 years ago, then more mainstream Conservative, but in the past 8-10 years I’ve been so disenchanted by Trump’s version of the GOP, I’m downright insulted to follow any labels. (Not by the ideas put forth, but more by how they’re communicated and enforced; and how the base is so pandered to. My conservative side is more traditional Bill Buckley and CATO; Austrian school of econ. Now I’m much more disillusioned at how poorly many industries attempt to “regulate themselves”). I’ve never been overtly liberal across the board, but I never shut down good ideas, or think about how they could be implemented without political freakouts.
The very fact that we went from 2 syllables to 5 has always annoyed the shit out of me. It’s symbolic for how time-wasting and fucking stupid the change was.
Trump reneging on a trade deal that he signed.
Japan has no tariffs on cars, and they use the international UNECE standards. We should sign on to the UNECE standards too.
Mexico accepts both US and international standards.
Detroit’s biggest success in Japan might actually be the Chevy Astro minivan. They like boxy shit over there.
Dajiban!
that too
I dont know if the Toyota Cavalier was a success, but it was a thing in Japan!
nope, a huge flop, for the obvious reasons like being below the quality of Japanese cars
I’d import a 2-3yo used R3X with low mileage from the future. Does that count?
I’d import a Kei truck. I’m looking at it currently as I just got a few acres of property and have been thinking one would make a great utility vehicle for around the property.
I have a 6×4 gator for property work and love it. No climate control but I can’t imagine a kei truck would be better. And they’ve been around long enough that you can get a decent deal on a used one.
Kei truck appeals to the oddball auto enthusiast in me. Although I am concerned about it being fairly old at this point and it being difficult to source parts for.
Everytime I drive by this place on HWY 48 north of Toronto, I’m tempted to pull in and see what their deal is. This pic is old, I’ve seen the lot crammed with Kei trucks, but there never seems to be anyone around.
https://www.google.com/maps/@44.2282925,-79.3356803,3a,75y,110.96h,89.32t/data=!3m7!1e1!3m5!1suZgtA0pmDxPAAYYZCj4MxA!2e0!6shttps:%2F%2Fstreetviewpixels-pa.googleapis.com%2Fv1%2Fthumbnail%3Fcb_client%3Dmaps_sv.tactile%26w%3D900%26h%3D600%26pitch%3D0.6753753188049956%26panoid%3DuZgtA0pmDxPAAYYZCj4MxA%26yaw%3D110.9612879185681!7i16384!8i8192?entry=ttu&g_ep=EgoyMDI1MDcwOS4wIKXMDSoASAFQAw%3D%3D
No.
If it works: just keep your car.
There are no Jones’ to keep up with.
Save your money.
“My vehicle’s value is way up, but I can’t afford to get a new car” is the new “I can’t afford to move.” And it’s accurate.
I’m living in one of the hottest housing markets in the nation right now. There’s just no supply. And those of us who have been here for a while don’t want to sell just to pay a lot more for something marginally better.
Cue Stellantis (or Ford/Chevy/GMC) with a ridiculous underwater payment plan for a new pickup truck:
“Can I interest you in a new Ram 1500 for a low $500/weekly for 96 months with zero down? We can even roll in the leftover financing from your existing car into your payments. How could you go wrong?”
Keep up with the Jones’. Buy a van so you can live next door to them down by the river.