From manufacturers to dealerships, the threat of tariffs is sending shock waves across the auto industry. While it’s hard to predict the long-term effect of these controversial policies, the near future looks chaotic. Dealers are bracing for impact as the taxes on imported vehicles and parts are projected to drive up costs, potentially thinning margins and hurting demand.
Every advantage counts in times like these, and that’s where modern solutions come in. Dealers and lenders are using CheckMy Driver to protect their finances by mitigating risk, reducing overhead costs, and fueling a more targeted sales engine.
How Tariffs Are Impacting the Auto Industry
To the average observer, it can feel dizzying trying to keep up with tariff news as the dates and details are constantly changing. Still, analysts are drawing rough estimates of the impact on the industry, and the numbers are eye-opening.
According to an analysis from Cox Automotive, if the current tariffs were in place from January 1, automakers would have racked up over $25 billion in obligations– translating to $2,500 per vehicle in added costs.
Of course, these costs are much greater for some manufacturers, depending on where their operations are based. Cox estimates that vehicles from the EU would cost an additional $8,500 per unit imported, and those from Mexico would cost an additional $4,800 each.
Why demand impact remains to be seen
You may have already heard car sales reps reporting demand changes due to tariffs– whether customers rushing to buy a new vehicle before prices rise or declining sales due to financial strain. But on a national level, analysts haven’t seen a major impact so far.
In the first half of 2025, new-vehicle sales rose 3% year-over-year, according to recent reports. However, this is likely due to the efforts of automakers and dealers to shield buyers from the true costs. While rising MSRPs are a reality, the average transaction price (ATP) has remained flat or even decreased slightly. However, this is not expected to last. Experts project that ATPs will climb 4-8% by the end of the year.
The true impact of these changes is likely to be felt by dealers, if not now, then in the very near future. Facing potential demand declines and shrinking margins, the auto sales industry will need to find new ways to adapt as we brace for the tough months ahead.
How CheckMy Driver Protects Your Profits
In a competitive market where businesses are laser-focused on reducing costs, it’s important to be selective about every new investment. It’s not enough for a product to be modern or cutting-edge– it also needs to deliver clear value. That’s why many dealers are turning to solutions like CheckMy Driver that work across multiple channels to improve operations, lower costs, and grow revenue.
Preventing catastrophic risks
Auto sales can be a high-risk industry, and a single loss can have devastating impacts on your business– especially when dealing with thinning margins. Whether you’re facing fraud threats or FTC compliance fines, it’s important to build a robust line of defense before it’s too late.
Combating Fraud
Economic downturns can unfortunately lead to an increase in fraudulent activities. Similarly, when vehicle prices rise due to tariffs, the incentive for individuals to misrepresent their information or attempt fraudulent purchases may also increase. In fact, a Point Predictive report estimated that the auto lending industry faced $9.2 billion in fraud risk exposure in 2024.
CheckMy Driver provides protection to ensure that red flags don’t go unnoticed. Our CheckMy ID feature doesn’t just scan your customer’s ID– it also checks the information against their insurance policy to ensure they are who they say they are. It can also be seamlessly integrated into your process to guarantee every customer is verified before a sale or test drive, even during the weekend rush.
Safeguarding Your Portfolio
For many dealers, insurance verification is a one-and-done step before a customer drives off the lot. However, if you are financing the vehicle, insurance is the only thing separating you from a financial nightmare in the event of an accident. CheckMy Driver’s monitoring feature keeps a close eye on all the vehicles in your portfolio, ensuring they maintain continuous coverage for the entire duration of the loan.
Ensuring FTC Compliance
The Federal Trade Commission (FTC) continues to enforce strict regulations, and the penalties for non-compliance can be staggering. Although the updated FTC Safeguards Rule went into effect on May 13, 2024, many dealerships still operate in violation of the new guidelines. For example, if you’re still taking photos of consumer documents or storing unencrypted data on your computers, you could be at risk of a breach and a fine of up to $53,088. CheckMy Driver helps ensure your team handles customer data safely, protecting both your customers and your finances.
Cutting costs with efficiency gains
Many businesses underestimate the cost of inefficiency within their operations, but it can quickly add up. Manual insurance verification can take a substantial amount of time– typically 15 to 30 minutes– from the customer retrieving their ID card to the F&I agent reviewing the policy.
If you’re paying your employees $25 an hour, that’s $6.25 in labor costs for a single verification. CheckMy Driver slashes this process down to just two minutes, eliminating wasted time and allowing your team to focus on sales.
Leveraging data for your sales engine
CheckMy Driver is not just an efficiency tool; it also helps you harness invaluable insights to power your sales engine. With our Driver Insights feature, you get a live look into your customer’s garage— not just for them, but for their entire household. From there, CheckMy Driver can import this information into your CRM to enable more personalized outreach and targeted offerings to drive more sales.
See How CheckMy Driver Can Work for You
No one can predict what’s going to happen in the automotive industry, but the impact of tariffs is likely to be a long-term challenge. Navigating this evolving landscape requires dealerships to be proactive in protecting their assets and improving profitability.
It’s not too late to invest in a solution to improve your bottom line. Talk to our team to see how you can mitigate risk, improve efficiency, and increase revenue with CheckMy Driver.