Rising Repair Costs Loom for Car Owners

Car owners may soon encounter higher costs at repair shops, as a leader in the auto parts industry warns that tariffs imposed by President Trump will likely lead to a substantial increase in basic repair expenses.

Anand Bishara, the CEO of Premium Guard, suggested that it might be wise for consumers to consider stocking up on essential parts. His company provides oil filters and other components to retailers and service chains across North America.

He mentioned to a news outlet that prices for items like catalytic converters, which previously cost around $1,200 to $1,500, might soar above $2,500 once the tariffs are fully in place.

Interestingly, Bishara predicted these price increases could begin appearing just as the holiday season arrives.

Premium Guard, or PGI, holds a significant share—about 30%—of the North American oil filter market and distributes private-label products utilized by various stores and online retailers.

Bishara emphasized that his company’s extensive involvement provides insight into the pressures affecting the automotive supply chain and what consumers might be facing in the near future.

As of now, drivers might not have felt the full impact, but it seems inevitable as price changes gradually reach retailers. He noted that this situation isn’t something that will shift quickly; suppliers and resellers were initially cautious before deciding to pass along the increased costs.

Earlier this year, PGI raised its prices by 4% to 5% to mitigate the impact of tariffs, but Bishara anticipates that more significant increases will manifest by late fall.

“Honestly, I think these hikes haven’t really hit the market yet,” he stated.

According to the tariffs enforced recently, imported vehicles now face a 25% customs duty. Bishara described this as a “huge shock” for the auto parts sector, a measure that was enacted in May and extended to include parts from nations like India.

India’s inclusion in this tariff process was unexpected, particularly as it was previously viewed as a viable alternative to China, which now faces additional tariffs of up to 50% on certain components. This disruption has impacted many manufacturers looking to diversify production.

Bishara remarked on the uniqueness of China, mentioning countries like Vietnam, which, although commendable, can’t match China’s scale.

In a related shift, major automakers like Honda, Hyundai, Mercedes-Benz, Nissan, GM, BMW, and Volvo have started moving production to the U.S. to avoid these high tariffs, reflecting a broader industry trend to localize manufacturing, create jobs, and protect future models, especially hybrids and electric cars, from import penalties.

He pointed out that relocating manufacturing isn’t straightforward, as establishing a new facility equipped with advanced technologies can cost between $30 million and $40 million per plant.

According to Bishara, tariffs will particularly impact categories like brakes, rotors, and hydraulic steering systems. He anticipates that the brake sector will experience severe consequences, leading to increases in the prices of common parts that typically wear out.

“If your car needs an oil change, you might delay it for a bit, but eventually, you have to take care of it,” he added.

The administration claims these tariffs are intended to encourage corporations to bolster domestic manufacturing.

Even for products that PGI no longer sources from China, the industry remains heavily dependent on rare earth materials from the country, which Bishara believes constitutes about 92% of the global supply. Therefore, components like catalytic converters and sensors could see further price jumps if U.S.-China trade tensions escalate.

Recently, China has agreed to ease strict export controls on rare earths, as per the current administration’s announcement.

Surprisingly, Bishara has not observed a rush among consumers to make purchases ahead of these anticipated price hikes. “Why buy a brake set if you don’t actually need it?” he mused. Yet he added, “But stocking up doesn’t seem like a bad move.”