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3 crucial lessons every dealership operator needs to know as tariffs hit

3 crucial lessons every dealership operator needs to know as tariffs hit

Insights from my emergency live panel

Anna del Villar & Car Dealership Guy
April 03, 2025

Hey, everyone — Last week, I laid out the non-negotiables Amazon Autos has to prioritize in order to be successful at selling used cars on behalf of dealers.

But after seeing the results of the poll I ran… most of you are unsure of whether Amazon can make it happen

Here’s the breakdown of 270+ responses:

Do you think Amazon Autos can pull off used car sales?
🟩🟩🟩⬜️⬜️⬜️ Of course... it's Amazon (26%)
🟥🟥🟥⬜️⬜️⬜️ Not a chance... it won't work (28%)
🟨🟨🟨🟨🟨🟨 Maybe... still too many unknowns (46%)

Bottom line—even with Amazon’s scale and infrastructure, selling used car won’t be a layup.

—CDG

First time reading the CDG Newsletter? Subscribe here.

President Trump’s auto tariffs on imported vehicles are here—and much like the early days of the pandemic, operators are embracing a “day-trader” mindset.

They’re holding aged units. Scooping up port stock. And working every deal knowing that future prices could change on a dime. But beneath the urgency is a shared reality. All stakeholders—from consumers to dealers, automakers, and suppliers—are waiting for clarity that hasn’t arrived.

In light of what’s going on—I held an emergency live panel with eight top operators, economists, and insiders to cut through the noise and unpack what tariffs could mean for the retail ecosystem. And their insights were eye-opening…

1. Buyer urgency is pulling demand forward in the short term—but it’s a sugar rush.

One of our panelists—Brett Morgan, CEO of Morgan Auto Group—oversees 75 dealerships and dozens of nameplates. He shared that 1 in 3 of his group’s incoming sales calls have been tariff-related over the past several days.

“ We had a really robust and healthy sales weekend, I'd say, plus 20-25% of where we thought we'd be,” said Brett.

Michael Speigl, dealer principal of WE Auto, echoed that—saying his import dealerships, surprisingly, “ set single-day records” without a discount in sight. He simply created an awareness campaign that prices would likely rise—which lit a fire under consumers.

So far—these experiences are showing up in the data. According to Motor Intelligence—automakers sold nearly 1.6 million vehicles in March, up 13.6% and in line with J.D. Power’s estimates.

But dealers know this demand spike likely won’t stick around. So—how are they hedging? Optimal used car inventory management.

Chris understands…

2. As tariffs hit new car pricing—used inventory may become dealers' most valuable asset.

Brett didn’t mince words: “We’re retailing everything we can get our hands on.”

He told his stores to hold aged inventory—even units that would normally be wholesaled after 60 days—because replacement costs are rising too fast to justify letting anything go.

Andy Wright, dealer principal of Vinart dealerships, backed that up, saying auctions have become a non-starter. “You can’t buy anything at a reasonable value,” he said. “Everything is overpriced—and going up.”

That tracks with the data. Jeremy Robb from Cox Automotive noted wholesale prices are accelerating faster than retail books can keep up—prompting Cox to revise its forecast for the Manheim Used Vehicle Value Index from 1.4% growth to 2.1%.

“We’re starting to see week-over-week gains happening again,” Jeremy said.

Take a look at some recent insights from the auction lanes…

Madness at West Coast used car auctions today:
• Tacomas going $5K over MMR
• Most Chevy trucks way up
• Fords holding steady, but the lanes were wild
Felt like “COVID” market is back.
— Car Dealership Guy (@GuyDealership)
8:40 PM • Apr 2, 2025

Jake Leibowitz, owner of Raceway Auto Group, is already working the trade arbitrage. His stores are stepping up on clean trades, especially low-day-supply units.

Big picture? New car pricing may be the headline, but used inventory is quickly becoming the real play. Meanwhile…

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3. OEMs, suppliers, and the government are not ready—and dealers know it.

While dealers are repricing trades, holding aged inventory, and sprinting through a shrinking window—OEMs are still trying to figure out how to bill for a car.

“They don’t know how to invoice yet,” Alan Haig, CEO of Haig Partners told us.

And that’s not hyperbole. Until OEMs know how to apply the tariff line by line, vehicles that are already built, sold, and scheduled to ship... can’t go anywhere.

Cliff Banks, editor-in-chief at The Banks Report added, “No OEM has said how they're going to handle the cost of the tariffs—whether it's passed on to dealers or baked into pricing.”

Which means—no one knows who’s going to pay, when it hits the field, or how much margin gets wiped.

Even manufacturers with U.S. factories aren’t insulated.

“Automakers are not nimble,” Brian Benstock, Managing Partner of Paragon Honda/Acura said. “They don’t have the ability to pivot.”

And while factories sort through legal memos and accounting models, dealers are left mostly in the dark—limited pricing guidance, unclear allocation plans, and no guarantees that today’s decisions won’t bite them in 60 days.

At the end of the day—no one in the industry can stop tariffs.

But they may finally force the auto industry to confront tradeoffs it’s spent years avoiding—which vehicles get built, where they’re sourced, and how pricing and incentives are structured to meet a consumer who’s already stretched.

The silver lining? We’ve been here before (pandemic-induced supply shortfalls, recessions, etc.)

But for the players who move with intent—not just urgency—there’s still a chance to come out leaner and more in control than before.