NerdWallet's Smart Money Podcast
Car Prices, Tariffs, and Trade-Offs: What to Know Before You Buy or Move Out
Thu, 10 Apr 2025
Learn how tariffs could impact car prices and how to know when it’s OK to spend instead of save. Should you buy a car now before prices rise due to tariffs? When is it okay to stop saving aggressively and spend more? Hosts Sean Pyles and Elizabeth Ayoola discuss recent auto tariffs and navigating major money moves to help you understand how external events and internal goals shape your financial plan. Joined by NerdWallet news writer Anna Helhoski and auto writer Shannon Bradley, they begin with a discussion of auto tariffs, with tips and tricks on when to buy a car, how much prices might rise, and when, if ever, they might come down. Then, personal finance writer Amanda Barroso joins Sean and Elizabeth to help answer a listener’s question about shifting from a strict savings mindset to one that allows for spending with purpose. They discuss how to create a flexible budget, build credit before moving out, and define life goals that money can help achieve. NerdWallet’s free investment calculator will calculate how much your investments will grow based on your planned contributions, timeline, rate of return and compounding frequency: https://www.nerdwallet.com/calculator/investment-calculator In their conversation, the Nerds discuss: auto tariffs 2025, car price increases, how tariffs affect car prices, used car prices 2025, new car tariffs, imported car taxes, car dealership pricing, buying a car before tariffs, Trump car tariffs, steel and aluminum tariffs, cost of imported vehicles, auto financing tips, how to build credit, authorized user credit, rent reporting services, when to stop saving money, how to enjoy money responsibly, 50/30/20 budget rule, financial goals in your 20s, when to move out of your parents’ house, financial independence early, investing vs life experiences, saving vs spending, credit score for renters, best time to buy a car, federal EV tax credit, retirement savings benchmarks, budgeting for rent, planning life around money, living intentionally with money, tracking net worth, and emotional spending habits. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [email protected]. Like what you hear? Please leave us a review and tell a friend.
Chapter 1: How do tariffs affect car prices in 2025?
Elizabeth, I don't know about you, but if I never hear the word tariff again, it will be too soon.
But it's our new reality, Sean. And they have the potential to affect just about everything we buy, including, perhaps most expensively, cars.
Tariffs are driving up the costs of all kinds of goods, including ones we drive. So we're going to talk about how to manage that cost. Smart Money Podcast, where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Piles.
And I'm Elizabeth Iola.
This episode, we're talking about letting loose a little with your money when you're ahead of the savings game. It doesn't always have to be about frugality. But first, our weekly money news roundup, where we break down the latest in the world of finance to help you be smarter with your money.
Unless you've been living in the desert for the last few weeks, you know we are in a new era of tariffs. President Trump has called tariff, quote, the most beautiful word in the dictionary. And he's followed through with one of the most significant trade wars in modern history.
Our news colleague, Anna Helhosky, is here with more. Give us the scoop, Anna.
Hey, Sean. Well, frankly, my anxiety is at a 10 right now with the back and forth nature of these tariff proclamations. I can also say as someone closely tracking the tariffs that the information coming out of the White House is changing too quickly to keep up.
It's been chaotic, to say the least, and it's producing a lot of uncertainty for the public, for businesses, the markets and within the government. And just remember, we haven't even begun to see the economic effects settle in.
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Chapter 2: Are new tariffs impacting the current car market?
And I get the feeling that Chris isn't someone who can just throw caution to the wind and spend their money freely. In that case, Amanda, your suggestion to try out budgeting could help them spend their money intentionally and allocate some of their money to the life experiences that they might be missing out on while still saving for retirement and other investment goals.
What do you think about that?
I think that's exactly what a budget is for. Like intentionality is a great word. In an uncertain economy, it can be really scary to spend money because it feels like you're eroding some of that safety net that you've worked really hard to build.
But if you've made a budget and you've built up an emergency fund with, let's say, roughly six months of living expenses, you're saving for retirement, for example, taking advantage of an employer 401k match or something like that. and you're paying down your debts, or in Chris's case, you have zero debts, then you could also give yourself permission to spend on things that fill your cup.
It might also be important for Chris to set a threshold. So, you know, how much money could they save that would make them feel safe to move out? Does the limit even exist, right? Like, that might be an important question to ask.
I know it feels like we have to be sitting on fat stacks of cash to simply exist these days, but there are some real benefits to moving out, even if it does cost, let's say, $2,000 a month in rent, like they suggest. Privacy and dependence and simply being accountable to only yourself can be an important part of adulthood for some people.
And maybe it's as simple as Chris asking their parents, hey, if this doesn't feel right, if it doesn't work out, can I come back? Having that safety net could make this feel less like a financial risk and more like a step toward building the life they want.
That's a really good point because oftentimes people think that when they make a decision, it is irreversible and they're stuck with it. But in reality, it's often not the exact decision that you make, but what you do with that decision and how you grow from it and maybe pivot from it. That can help you long term.
But in general, I kind of get the sense that Chris is maybe a pretty numbers focused person and likes to map out their finances in detail and. In that case, they could put together maybe a few mock budgets for different scenarios and different lifestyles. One could be having a studio apartment. Another could be having roommates.
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