The Trump administration plans to roll back Biden-era environmental standards for vehicles, aiming to cut the average cost of a new car by $1,000. However, experts warn that the savings may not translate to actual relief for consumers. Prices for new vehicles have surged over 25% in the past five years, with the average cost now exceeding $50,000. Many Americans are hesitant to buy new cars due to the financial strain.

Despite the potential price drop, the math still doesn’t add up for many buyers. About 80% of car sales are financed, with the average monthly payment reaching $748. Interest rates have soared since 2019, leading to nearly one in five buyers paying $1,000 or more each month. Affordability remains a pressing issue in the current market.

Auto loan rates for new vehicles stand at 6.56%, while used cars have an 11.40% rate as of the third quarter. With interest costs increasing, even a slight price hike can make a vehicle unattainable for many buyers. Affordability in the new-car market remains a challenge, as interest rates continue to rise.

The promise of lower vehicle prices may not deliver the relief consumers are hoping for. The administration’s move to reduce prices could come from producing fewer electric vehicles, rather than lowering the cost of the cars consumers want. President Trump has dismissed broader affordability concerns as a “hoax” and a “con job,” adding to the uncertainty in the market.

While the administration aims to bring down costs, a 25% auto tariff could add thousands of dollars to vehicle prices. Automakers have absorbed billions in tariff costs, but as pre-tariff inventory sells out, prices are beginning to rise. Buyers need to be vigilant and prepared to navigate the changing market dynamics.

If you’re in the market for a new car, consider negotiating with dealers who may be holding unsold inventory. Shop around for financing options before visiting the dealership, as better rates may be available elsewhere. Making a larger down payment or choosing a shorter loan term can also help reduce overall costs in the long run.

Read more at Yahoo Finance: Trump promises to slash $1,000 off car prices that Americans say are ‘ridiculously overinflated.’ Should you buy that?