So, the bad news is we’re currently paying a 25% tariff on cars built in Canada. But the worse news is we’re about to be paying a 50% tariff on those vehicles. Hey, we never said we had good news for you. The tariffs are making cars more expensive, and we’re paying for them twicebecause our tax dollars are going to the refunds.
If there’s a silver lining to all this, well… maybe it’s that it’d give you an excuse to buy that new Canada-built Toyota or Honda you’ve had your eye on before the price goes up?
What’s Going On With The Tariffs This Time?
2026 Toyota RAV4Toyota
The long and short of it is that tariff rates are about to double from 25% to 50% on cars imported from Canada. That includes Canadian-supplied components, too. So if your car is 15% Canadian, you’re paying a 7.5% tariff on the car. The new tariff is set to go into effect January 1st, 2027. To be clear, it’s going to be the American consumer paying the difference, just like it has been with the last several rounds of tariffs.
Worse yet, retaliatory tariffs mean we’re paying for the trade war several times over before the products even hit the market. If a Canadian car uses US components, that’s driving the price up from the jump. Then that car is shipped back over the border for sale in the US, and we’re paying for it again.
Great News For People Who Hate Having Money
2026 Lexus RX 500h F Sport PerformanceLexus
Whoever you may think is at fault here, nobody on either side of the border seems to be all that interested in easing your burden as a buyer. Canada has promised dollar-for-dollar retaliation to every tariff the US imposes on them. So, if you were to buy a Canadian-built car with 15% US components next year, you’d be paying for the 50% tariff, plus another 7.5% to cover Canada’s end on importing US parts, or 57.5% total.
The price increases will vary from car to car. Some Canadian-made cars might not contain any US components; others might contain much more than 15%. Some cars won’t be imported from Canada at all, but may contain so many Canadian parts that you’d pay out the nose no matter where the vehicle was assembled.
Is all of this worth it to bring manufacturing jobs back to the US? Could it bring manufacturing jobs back to the US to any significant degree? That’s for a more politically-inclined website to cover. All we’re here to do is tell you what it would cost you in the short term, which is a lot.
Here’s What You Can Save If You Buy Now
2025 – 2026 Honda Civic Sedan 11th Gen (FE) Facelift Honda
Exact percentages per vehicle aren’t always available, but Canada’s Automobile Protection Association estimates that a typical Canadian-built car uses roughly 30% US-sourced components.
This means that, any car that comes over the northern border next year, we can assume will come with a 50% tariff just because, plus another 15% in tariffs on US parts for the fun of it, because you can’t expect Canadian car-builders to eat that cost on our behalf, right? That adds up to a 65% price bump.
Now, we’re already paying half of that, so we can cut this down a bit by undoing that 32.5% from the current MSRP (25% tariff on the finished car, plus 25% on 30% US parts), and then adding 65% back. It’s still more than we want to be paying, but it’s 65% more than what we could be paying (or should be paying), not 65% more than what we’re currently paying.
Base MSRP
Projected 2027 Pricing
Price Bump
Toyota RAV4
$31,900
$39,722
$7,822
Lexus NX
$47,220
$58,801
$11,581
Lexus RX
$52,775
$65,717
$12,942
Honda Civic
$24,695
$30,751
$6,056
Honda CR-V
$31,520
$39,250
$7,730
Part of the appeal of buying a luxury car is flexing that you can afford it. Now, that privilege is no longer limited to Lexus, BMW, and Mercedes-Benz fans. Canadian-built family SUVs will now cost as much as an entry-level luxury vehicle, so that’s pretty cool, right? The Honda CR-V is about to become the perfect purchase for people who tip their landlords.
But seriously, you could be saving as much as $12,942 if you buy a Lexus RX right now, instead of waiting until next year. Even the relatively affordable Honda Civic could be going up by over $6,000.
These Are Just Estimates Based On What We Know Right Now
2026 Honda CR-VHonda
Note that these numbers are just our own estimates based on the Canadian APA’s 30% figure on US-sourced components. Remember that, first, we don’t know exactly how Toyota and Honda arrive at a particular MSRP in the first place. Second, the amount of US content actually varies from vehicle to vehicle, and Toyota and Honda may already be in the process of looking for alternative parts suppliers.
But on average, we’re probably going to pay around 65% more for each new car than we would with no tariffs in place, which comes out to twice what we’re paying in tariffs right now.
You’re Going To Be Paying More For Repairs, Too
2026 Lexus RX 350 Premium AWD rear 3/4Lexus
Honda and Toyota build some of the most dependable cars in the world, with affordable, common parts that just about any garage in the country can replace and install. Now get ready to pay more for parts, because Japanese cars sold in North America contain an average of 35% Canadian components, according to the APA. Here’s how that’s going to affect maintenance costs for Canadian-built Toyotas and Hondas.
Annual Maintenance
Projected 2027 Maintenance Costs
Price Bump
Toyota Rav4
$429
$464
$35
Lexus NX
$690
$746
$56
Lexus RX
$550
$595
$45
Honda Civic
$368
$398
$30
Honda CR-V
$407
$478
$69
If you want to check our math, we used RepairPal for the above estimates. We undid the 8.75% price bump (25% times 35% Canadian parts) and added 17.5% back in (50% times 35% Canadian parts). The price bump is considerably smaller than what we’re seeing with the price of purchase, but the tariffs are something we’re going to be covering for years to come. Buying a Honda or a Toyota right now means avoiding the worst of it, but it doesn’t mean you’re completely off the hook.
Now, at most, this comes out to a difference of $69 a year in maintenance. That’s not so much money spread out over 12 months. But it is just enough to irritate you every time you go to the garage, because you’ll know you’re spending $15 or $25 more per repair bill than you were spending a year ago. It might not put anyone out of house and home, but it’s definitely going to grind our gears; we can tell you that.
You Could Wait It Out, But You Might Be Waiting For A While
2026 Toyota RAV4 x2 Woodland Gray Front Limited Storm Cloud Rear DrivingToyota
The new Canadian tariff rate could eventually be struck down, but our best advice right now is not to hesitate on buying a new Honda or Toyota. Wait until January, and you could be spending thousands more than you’d be spending today. Wait until the tariffs are removed, and you could be holding off even longer to see if Honda and Toyota drop their prices, now that they know what people are willing to spend.
We’re all going to be paying for these tariffs in one way or another. You could cut your driver’s license up and never drive a car ever again, and you’re still going to be hit by the ripple effect of increased transportation costs. But you can avoid the worst of it by not waiting for the other shoe to drop.
Sources: Honda, Toyota, RepairPal, APA.ca.
