Vehicle inventory levels in the U.S. are declining sharply as consumers rush to purchase cars and trucks ahead of potential price hikes caused by import tariffs. According to industry data, the days’ supply of new vehicles—based on current sales rates—fell significantly from 91 days in early March to just 70 days. Used car supply, which was already constrained, dropped further to 39 days.
Industry analysts say the rapid drop is directly linked to consumers anticipating higher prices due to tariffs on imported vehicles. Typically, fluctuations in monthly supply range from five to seven days, making the recent drop one of the steepest seen in recent years. The surge in demand has pushed new vehicle sales 22% above last year’s seasonally adjusted pace, and year-to-date figures show an 8% increase. The used car market has also experienced a strong uptick, with sales rising 7% compared to 2024.
While this sales boost is a positive short-term development for automakers and dealers, experts warn that the momentum could stall as tariff-free inventories are depleted. An auto industry advisory firm estimates that the higher production and import costs linked to tariffs could result in the sale of 2 million fewer vehicles annually across the U.S. and Canada. Automakers may absorb some costs, but a portion is expected to be passed on to consumers, likely softening future demand.
In preparation for the 25% tariff that took effect on April 3, many automakers stockpiled imported vehicles. Others, however, have altered shipping schedules, delayed releases at ports, or suspended imports altogether, as seen with Jaguar Land Rover. General Motors responded by ramping up domestic production, increasing output at its Indiana pickup plant and cancelling planned downtime at a Tennessee facility.
Meanwhile, dealers report a blend of tariff-fueled buying and improved inventory levels driving current performance. Some manufacturers, including Ford and Stellantis, are using this window to reduce inventory by offering aggressive “employee pricing” promotions.
While sales volumes remain strong, some dealers note that profit margins are tightening. The next two to three months are expected to be critical in determining how tariffs will affect the auto market. Industry leaders continue to monitor the situation closely, with hopes that any policy adjustments will ease pressure on both suppliers and consumers.
READ MORE: