By coinnews 
00:00 Josh
Well, you might start seeing higher prices at your local car dealer with President Trump’s auto tariffs set to take effect next week. Yahoo Finance senior autos reporter Pras Subramanian is joining us now from a local dealership. Pras.
00:15 Pras Subramanian
That’s right, Josh. I’m here in New Jersey, uh Celebrity Motorcars Lexus dealership here. Uh, during with us Tom Mayola, the owner of the dealership, and also a number of other uh brands in in in in the area. So Tom, I think a lot of people are talking about what’s the tariffs going to mean? What’s it going to mean for for everyone here? What are you seeing right now at the dealership floor?
00:35 Tom Mayola
Well, we’re seeing people come in, they want to buy cars because they’re afraid. They don’t want to pay that 10% additional. You know, the average car in the United States of America is now sells for $40,000. So you’re talking about a $10,000 increase. When you finance that out, it’s it’s about $30,000. It’s $300 more on a payment. They’re buying, they want to buy now.
00:51 Pras Subramanian
You know, I was shocked to hear that 300 more additional to a payment that, you know, for some people, they’re already paying almost $1,000 on a car payment. You know, I think there’s some talk about how you the dealers, what are they doing to prepare to sort of insulate their customers from the tariff effects?
01:03 Tom Mayola
Correct.
01:04 Tom Mayola
Well, listen, there’s there’s not really much we can do right now. The only thing we can do is build up inventory, try and get inventory from the manufacturers as much as we can, whatever’s on the ground and the ports. And the same thing on the parts side because it’s going to affect repairs. That same 25% tariff is going to affect repairs. Repairs are going to go up. And you know, if they’re not buying, consumers have to repair because they have to keep their cars on the road. You can’t stop transportation.
01:24 Pras Subramanian
So you’re going to have older cars on the road being repaired with more expensive parts, right? So with regards to the new market and we know we’re in a Lexus dealership right now with most of the cars coming in from Japan, are you concerned that new car sales are going to crash?
01:36 Tom Mayola
That’s correct. Yes. No, listen, they’re not going to crash because like as I said before, you can’t stop transportation. Ultimately, the consumer’s going to have to do one of three things. They’re going to buy a new car at the higher price, which which that’s going to, I believe, pull back. They’re going to either fix their car and elongate the cycle, keep their car for 150,000 miles and just keep it glued together, or they’re going to try and buy a used car. And the used car market is going to skyrocket because there’s there’s only a certain amount of used cars out there and and that’s an alternative to buying a new car.
02:06 Pras Subramanian
You know, I know you work with brands like BMW, Mercedes, Ford, Lexus. Yes. Different sort of scenarios for each brand, but overall, it’s concern, right?
02:19 Tom Mayola
It’s a concern and it’s consistent. You know, it’s interesting because, uh you know, if you look at what happened in the stock market yesterday, all the domestics, GM, Ford, Chrysler, Stellantis, they all crashed. So this is not really helping the domestics by doing this because they buy their parts from overseas also. So they’re getting their parts from Mexico, uh Canada, China, Japan. So it’s going to affect them also.
02:42 Pras Subramanian
You know, I I know that you were involved with the the Trump transition team in in in his first term. Uh, you’re close to the Republican Party. What would you tell President Trump and and some of his advisors? What should they be doing right now? Uh, is this the right move is, I guess, I’m trying to say?
02:53 Tom Mayola
Yes.
02:54 Tom Mayola
Listen, he’s a brilliant man. He knows what he’s doing, but I could tell you that if I were to make this decision, or I sat down with him uh to talk to him about it, I would say, do, you know, change the methodology and instead of doing this with a stick, do it with a carrot. You know, we we want to drive manufacturing back to the US, and if you do it with a carrot, you offer tax incentives, you order you order uh offer interest-free loans to these to the manufacturers to put their plants here. And if if you get interest-free loans with long-term paybacks and uh tax incentives, they will come anyway. They’re going to build it here anyway, because that’s how it happens. You know, look at real estate. If you look at Florida, you you ride down the highways of Florida, and there’s cranes everywhere. It’s because they have no state tax. So there’s an incentive. And so I would say, forget the stick and do it with a carrot.
03:28 Pras Subramanian
Carrots like incentives I think might be a good idea for bringing back those jobs, which you know, are high paying here. So, Tom, we’re running out of time, but thanks so much. Really appreciate it.
03:37 Tom Mayola
Absolutely.
03:38 Pras Subramanian
At Celebrity Motorcars. Thank you. Back over to you, Josh.
03:41 Josh
All right, thank you so much, both Tom and Pras there.