Sanitation: Is this the worst time to buy a new car? 🚗

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On the Money

By Lauren Young, Digital Special Projects Editor

My husband and I live in a city, so we don't use our car on a daily basis. It gets a lot of mileage on summer weekends when we head out of town to escape the heat and see family and friends.

We hoped to purchase a new car next year, preferably a hybrid. But, thanks to the latest round of tariffs announced by U.S. President Donald Trump on Liberation Day, I am simply praying that we will be able to drive our current car for as long as possible since vehicle prices are expected to rise amid inflation, recession threats and supply-chain pressures.

No wonder that Americans have been rushing to buy cars in recent weeks after Trump announced 25% tariffs on foreign auto imports. Bill Donahue, a consultant based in Massachusetts, bought a new Toyota Camry hybrid for his wife on Friday. Donahue says he used the Consumer Reports Car Buying Guide and negotiated with four dealers via text. (I'm especially impressed by that!)

"I quickly eliminated two dealers who are already adding a premium to MSRP in anticipation of the tariffs," Donahue says. "I worked the deals between the other two dealers and got a deal done within an hour for $1,500 under MSRP." (MSRP is car-speak for the Manufacturer's Suggested Retail Price.)

Donahue is lucky he found the make and model he wanted – he is also fortunate he was able to seal the deal so quickly.

But that was last week. This week Americans are facing a completely different roadmap. Those 25% tariffs on auto imports may cost American consumers more than $30 billion in higher vehicle prices and reduced car sales in the first full year, consultancy firm Anderson Economic Group said in a report today.

I could go on and on. But I want to hear from you! Are you in the market for a new car? Are you considering leasing one? Share your experiences or thoughts about tariffs with me at onthemoney@thomsonreuters.com.

🚗 For the latest auto news, be sure to bookmark our transportation page and sign up for our Auto File newsletter.

📣 Follow me on the socials: @laurenyoung on X, @laurenyoung.bsky.social on Bluesky and here on LinkedIn.

Speaking of tariffs

I feel like my work life is all tariffs, all the time.

While we finally have more clarity on new tariffs, let's look at history as a guide to see what the future might hold for prices and trade. Here is how previous tariffs impacted washing machines, tires and TVs, illustrated in a very user-friendly graphic.

Of course, even if Americans have the opportunity to buy more domestically made products, the global supply chain is complex and interconnected. Prices are expected to rise in many industries, experts say. A recession is likely to follow.

Since we will be holding onto our car longer than expected, there is a good chance it will need pricey parts when it is serviced, regardless of whether they are made overseas or in the United States.

Indeed, one of the world's largest auto suppliers is preparing for tariffs, and their outlook is not pretty.

🍔 Side note: Tariffs will also drive up the price of food, including hamburgers.

🎯 It is not easy to keep up with the latest tariff news. And that's why you need to subscribe to our new daily news digest, which offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here.

What I'm reading and watching

Video of the Week

President Donald Trump's move to impose sweeping tariffs on US imports has sparked threats of retaliation. But what exactly is a tariff? And what happens next? Carmel Crimmins from the Reuters Econ World podcast explains.

How to age wisely, Part Two

Peace is the word. REUTERS/Shannon Stapleton

How long will I live? Will I be healthy? Will I lose my memory? How long will I work? Will I have enough money? Where will I live? How will I die?

In my last newsletter, I wrote about Debra Whitman, who is the author of The Second Fifty: Answers to the 7 Big Questions of Midlife and Beyond and chief public policy officer at AARP. I also asked readers what word they think of when they think of aging.

Here are some of the words you submitted:

Perseverance

Endurance

Opportunity

Freedom

Reawakening

Wisdom

Peace

Responsibility

Is anything missing from this list? Write to me at onthemoney@thomsonreuters.com.

Student borrowers face lower credit scores

Student borrowers face a big drop in credit scores. REUTERS/Brian Snyder

More than 9 million student loan borrowers face substantial drops in their credit scores, the Federal Reserve Bank of New York says.

Student loan borrowers played a prominent role in credit issues over recent years. Government programs during and after the most acute phase of the COVID-19 pandemic granted student loan holders payment forbearances, and the Biden administration tried to forgive many types of loans, although much of that effort was stymied in the courts.

There has been a lot of confusion about student debt payments in the past few years. A 12-month moratorium on reporting loan defaults to the major credit bureaus closed on Jan 1.

As of last August, one in five borrowers made zero payments toward their student loans, as many held out for loan forgiveness, according to Credit Karma.

What should you do if you have student debt now? First, check with your borrower to see how much you owe. Next, discuss your repayment options. The worst thing you can do is ignore your student debt and ruin your credit.

Here are some tips to take charge of your student loans.

A$k Lauren

Do you need last-minute tax help? Are you looking for cheaper homeowners insurance? Send questions to onthemoney@thomsonreuters.com, and I'll tap my extensive source network and braintrust for expert advice.

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