A recent report on the automotive industry found that tariffs have not yet had an impact on car sales in Colorado.
So far this year, there were 110,379 new vehicle registrations, compared to 101,950 in 2024. This is up more than 8%, compared to the U.S. average of 6%.
The Colorado Automobile Dealers Association released the report, which includes data from the first and second quarter of 2025. The association advocates on behalf of the automotive retail industry throughout the state, including its 260 member dealerships.
In an exclusive interview with The Center Square, association CEO Matthew Groves said the car market in Colorado remains healthy.
“The overall market is predicted to be about 219,900 this year. While down 1.0% from last year, anything over 215,000 is healthy,” he said. “Year-to-date, our growth outpaces national growth in sales. That’s great news for Colorado.”
This is good news for the car market in Colorado, which was under that healthy market number of 215,000 for several years during and after the COVID-19 pandemic.
Many have been warning about the potential impacts of tariffs on the economy, but especially in industries like the automotive industry.
Democrats have been especially concerned.
“Colorado businesses and consumers have been struggling with the uncertainty that these reckless tariff-taxes have caused for six months,” said Sen. John Hickenlooper, D-Colorado, on social media on Wednesday.
Groves said overall cost is the real issue for consumers, which tariffs can play a role in.
“Tariffs are a subset of a far greater problem, which is overall cost,” he said. “Drivers need affordable cars. To the extent that tariffs complicate that, they’re bad. However, high interest rates typically have a more severe effect on overall affordability than tariffs.”
This is good news for some, as the One Big Beautiful Bill Act will allow taxpayers to deduct up to $10,000 of interest payments annually on loans for new American-made vehicles from 2025 through 2028.
Groves added he expects the ongoing impact of tariffs to be minimal.
“While the threat of tariffs are on people’s minds, you can see the percentage of Asian vehicles is barely impacted this year,” he said. “And, with the announcement of a deal with Japan … I think that market will be just fine.”
According to the report, it does expect the automotive industry in Colorado to slow slightly in the rest of the year.
“New vehicle registrations in the second half of the year are projected to decline from the year earlier, but the situation is highly dynamic and subject to change, so stay tuned,” it stated.
It also found that, while the market has been holding strong, tariffs could also be playing a role in that.
“Sales were pulled ahead this year as shoppers advanced purchases due to the anticipation of higher vehicle prices resulting from tariffs,” the report said.
All sectors of the market, including domestic, European, Japanese and other Asian, saw similar increases in the first two quarters of the year over last year. Notably, the domestic market saw an increase of just 6%, compared to the Japanese increase of 11%.
Ultimately, while tariffs do “throw a wrench” into the economy, the report says the key factor to keep an eye on will be affordability.
“The global economy is intricately interconnected, and the introduction of this level of policy uncertainty has left both businesses and consumers partially paralyzed. This level of disruption is substantial and without historical precedence, which makes isolating the impact on new vehicle sales very difficult,” it said. “Bottom line: Higher tariffs will likely lead to rising vehicle prices and in the short run, increasing inflation, lower economic growth and stagnant household disposable income, all negatives for new vehicle sales.”
