Welcome to the Daily 5 report for Friday, May 23. TGIF!
For those of us who watched the Automotive News live session yesterday on LinkedIn, a clear theme emerged: Affordability is a bigger concern than ever, particularly with tariffs about to hit sticker prices.
The full impact of tariffs won't start to be felt for another few weeks, as Richard Truett writes in this story. That's when tariffed vehicles replace vehicles already built before tariffs took effect. But buyers are already starting to move to lower-priced cars, the story said.
"Consumers are under enormous pressure," Mike Maroone, CEO of Maroone USA, said during the session.
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The strategy of keeping monthly payments affordable by offering longer loans is courting danger, panelists said. A record 20 percent of auto loan originations in the first quarter were for 84-month terms while the average amount financed rose to $41,473, Edmunds found. Cloud Theory's 2025 vehicle price tracker, which is updated in real time, shows the average marketed price for U.S. light vehicles stands at $49,873 today.
"We need to reach out to all of our legislators nationwide and talk about our fears about payments. And the fact of the matter is tariffs are going to raise those payments," said Don Hall, CEO of the Virginia Automobile Dealers Association.
He added: "People will be upside down forever, and we will not be able to trade them out. It is a major problem."
Some help could be on the way in President Donald Trump's so-called Big Beautiful Bill, which passed the House this week. The bill, if it becomes law, would permit consumers during the 2025 to 2028 tax years to deduct up to $10,000 in interest per year on consumer vehicle auto loans. Higher-income households would not be able to claim their entire interest payment, our story says.
Meanwhile, from Automotive News Canada, Industry Minister Melanie Joly suggested that a drive to bolster Canada's military will form part of Ottawa's response to U.S. tariffs. Joly on May 22 toured General Motors' Oshawa Assembly Plant, a factory that recently absorbed a direct hit from Trump's 25 percent auto tariffs. She suggested higher Canadian defense spending could provide support for industries affected by tariffs, including automotive. There was no comment from GM on the visit.
That's it for now. Have a great holiday weekend. The Daily 5 will be back on Tuesday, May 27. If you want to view this story in your browser, click here.
— Philip Nussel, online editor
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