Potential Impact of the Presidential Election on the Automotive Industry: What to Expect for Car Buyers in 2025
The automotive industry is on the brink of major changes following this year’s presidential election. With the state of the economy hanging in the balance, including factors like inflation and interest rates, the future of cars, particularly electric vehicles (EVs), is uncertain. Vice President Kamala Harris, while not outlining specific plans for the car industry, is expected to continue many of the policies initiated during President Joe Biden’s term. This could potentially lead to a shift in environmental policy and regulations, paving the way for greater support for EVs.
Ryan McEachron, a financial advisor and owner of ISU Armac Insurance Services, shared insights on how economic and policy changes might impact future vehicle purchases. One significant area of focus could be making EVs more accessible to the average consumer. Under Biden, legislation like the Inflation Reduction Act of 2022 and the Bipartisan Infrastructure Law have already made strides in this direction by offering tax credits and incentives for EVs.
The average cost of a new electric vehicle currently stands at $56,371, compared to $48,644 for gas-powered vehicles. However, with tax credits of up to $7,500 available for EV buyers, the cost difference becomes more manageable. The potential continuation of these initiatives under a Harris presidency could further drive the affordability and accessibility of electric vehicles.
In addition to EVs, the impact of inflation and interest rates on car affordability is a concern for many buyers. Higher inflation rates typically translate to higher interest rates, affecting the overall cost of purchasing a vehicle. Regardless of the election outcome, managing inflation and interest rates will remain a key challenge in the automotive industry.
While major policy changes take time to materialize, buyers planning to purchase a vehicle in 2025 or beyond should stay informed about evolving industry trends. Researching fuel efficiency, technology, and long-term ownership costs is crucial in making an informed decision. Consulting with financial advisors on financing options, tax implications, and insurance costs can also help buyers navigate the changing landscape of the automotive industry.
In conclusion, the automotive industry is poised for transformation in the coming years, with a potential focus on making EVs more accessible and affordable. Buyers should stay proactive in their research and financial planning to make informed decisions about purchasing a vehicle in the evolving market.