Each time a new president comes to power in the White House, America braces for some change to its policies and procedures regarding business, government oversight, and regulations that keep its people and the planet safe.
It would be nice to see an administration come in and build on the policies of the last term, though that usually doesn't happen when the power flips between parties. This may be especially true in the next term, with experts saying many changes are afoot. Will the state of regulatory affairs change under a Trump presidency, especially when it comes to vehicle regulations? Experts think so.
What Changes Are Experts Predicting?
Experts predict a "quieter" FTC and CFPB under the new administration and also a slew of Biden-era regulations to be repealed. The FTC's CARS Rule, for example, which aims to impose dealership advertising and finance requirements for more transparency with customers has barely gotten off the ground. It may fizzle under a less-regulatory administration, according to some experts.
Brooke Conkle and Chris Capurso, from Atlanta-based law firm Troutman Pepper, told Automotive News they see the CARS Rule at risk under a Trump presidency. "[The CARS Rule] blows in the wind of whichever party takes control," Caprurso said. But he added that dealerships may not be able to avoid some of the transparency the rule demands.
Additionally, the talk of greater tariffs on foreign-made vehicles is sure to raise the prices of some of the most popular vehicles in America, like Europe's BMW, Audi, and Mercedes-Benz, as well as Asian automakers.
Tariffs are taxes imposed by the government on imports and exports. Tariffs are an important source of revenue for a government and can be used as a form of regulation for foreign trade. The important thing to know about tariffs is that a tariff on imports means higher taxes for you. If you want to purchase a foreign vehicle like a German-made BMW, or a South Korean make, like a Kia or Hyundai you could be in for a shock when it comes to out-the-door pricing. However, what these taxes will be or how high they become is yet to be seen.
Other changes experts say may come down are regulatory changes to the Environmental Protection Agency, which has a say in clean energy and emission standards across the country. In a Trump-era administration, we're likely to see some clean energy acts repealed and may see more of a push for domestic fossil fuel production, something that happened in the last Trump term as well.
To this end, we may see some of the incentives for buying an EV go by the wayside as well, such as the EV tax credit.
How Might These Changes Affect You
What all of this ultimately leads to is a possible future where vehicles are even more expensive than they are today. Experts are also expecting there to be less choice of vehicles available to Americans if the proposed tariffs are greater than those we already see.
Tariffs could not only keep cheap foreign EVs from hitting the US market, but they could also affect parts and U.S.-brand vehicles that are produced in other countries, such as Mexico. If this happens we may end up seeing supply chain issues similar to what we saw during and immediately after the pandemic. However, nothing is certain, and according to USA Today, some forecasters from Cox Automotive are predicting that the auto industry, whatever comes, will "motor on."
How Auto Loans Could Be Impacted
When it comes to auto loans, the future is as uncertain as ever, but we do know that with inflation cooling, interest rates are starting to come down. So, if this trend continues into the next administration, we could see loan rates continue to fall. However, if materials and vehicle prices get more expensive, it could be a wash.
For now, all we know is that interest rates on auto loans are coming down, and until the next administration is sworn in, things should remain the status quo, which currently is cooling car prices, and falling interest rates.
If you're not eager to wait around and find out what happens, we suggest investing in your automotive future now, especially if you've got your eye on an EV or hybrid which could earn you a tax credit.
Source: Automotive News (Subscription Required)
