A Toyota RAV4 buyer in April found a $1,400 "tariff adjustment" line item on their purchase contract. The RAV4 was assembled in Georgetown, Kentucky. Kentucky-built RAV4 Hybrids are not imported. They pay no 25% import tariff. The $1,400 was dealer profit, relabeled.
A Reddit user who works at a Toyota dealership confirmed it plainly: "That $1,400 is just a dealer markup they are trying to get away with." Dealers across brands are doing the same thing. The 2026 tariff environment provides convenient cover because real tariff costs also exist, and most buyers can't tell the difference.
There are three distinct ways tariff costs hit what you actually pay for a new car this year. Only the third one is manufactured. Understanding all three tells you what's legitimate, what's hidden-but-legal, and what you can refuse at the table.
Layer 1: Manufacturer Tariff Pass-Through
The 25% tariff on imported vehicles took effect April 3, 2025, under Section 232. For vehicles assembled outside the US, Canada, and Mexico, that cost is substantial. For USMCA-compliant Canadian and Mexican-built vehicles, a partial offset mechanism softens the impact, but doesn't eliminate it.
Kelley Blue Book estimated the added cost ranges from $5,000 to $8,900 on affected imported models. Even US-assembled vehicles that rely on globally sourced parts absorbed an estimated $1,600 to $2,000 per vehicle in higher component costs.
Which vehicles carry which exposure:
| Model | Assembly Location | Tariff Tier | Est. Cost Added |
|---|---|---|---|
| Honda CR-V (gas) | Alliston, Ontario | Full 25% | $5,000–$8,900 |
| Toyota RAV4 (gas) | Woodstock, Ontario | Full 25% | $5,000–$8,900 |
| Honda CR-V Hybrid | East Liberty, OH | Parts tariff | ~$1,600–$2,000 |
| Toyota RAV4 Hybrid | Georgetown, KY | Parts tariff | ~$1,600–$2,000 |
| Ford F-150 | Dearborn, MI | Parts tariff | ~$1,600–$2,000 |
| Chevrolet Silverado | Fort Wayne, IN | Parts tariff | ~$1,600–$2,000 |
| Jeep Grand Cherokee | Detroit, MI | Parts tariff | ~$1,600–$2,000 |
Source: Assembly locations per NHTSA data. Tariff cost estimates per Kelley Blue Book April 2026 analysis.
If you're buying a Canada-built CR-V and the MSRP is $1,500 higher than last year's equivalent trim, that increase includes real tariff pass-through. This is legitimate. Manufacturers absorbed some of the cost; the rest came through as price increases.
Layer 2: Destination Fee Inflation
Destination fees are mandatory. You can't negotiate them. The manufacturer sets them, they appear on the Monroney window sticker, and every buyer pays the same amount regardless of where they buy the car.
They've also become a vehicle for hiding tariff cost recovery without adjusting the advertised "starting at" price.
The average destination fee in the US jumped 67% from $952 in 2015 to $1,592 in 2026, per Autoblog's analysis. Ford and GM full-size trucks now carry a $2,795 destination charge. Alfa Romeo charges $3,250 on the 2026 Stelvio and Tonale. GM raised the Silverado's destination fee 40% in a single year. At the truck's sales volume, that single fee increase generates approximately $748 million in additional annual revenue.
Automakers have been folding tariff cost recovery into destination fees specifically because the advertised vehicle price stays unchanged. The car is listed at the same "starting at" figure. The actual price you pay doesn't.
This cost is real. You won't avoid it. But it should factor into your year-over-year price comparison because it's not showing up in the headline MSRP figure.
Layer 3: The Dealer Markup
This is the one you can walk away from.
A dealer "tariff adjustment" fee is not a tariff. It's a line item in the buyers order, set by the dealership, that goes directly to dealer profit. Dealers aren't required to explain what it covers. Most buyers assume anything labeled "tariff" is government-mandated. It isn't.
NHTSA requires every new vehicle to display a window sticker showing the country of final assembly. If that sticker says "Final assembly: Georgetown, KY" and the dealer is also charging a $1,400 tariff fee, those two facts don't coexist cleanly. A Kentucky-assembled vehicle's tariff exposure is roughly $1,600 to $2,000, and that's already priced into the MSRP by the manufacturer. A separate dealer tariff line item means you're paying the tariff cost twice: once in the price, once in the fee.
For a Canada-built vehicle with genuine $5,000 to $8,900 tariff exposure, the math is more complicated. Manufacturers have passed through some of that in MSRP. Whether a dealer has legitimately absorbed additional wholesale cost above that is harder to verify. But the same test applies: is this fee on the manufacturer's window sticker, or is it an additional line item the dealer added?
If it's additional and the car was domestically assembled, you're looking at a markup dressed as policy.
How to Check Assembly Location
The 11th character of a VIN tells you where a vehicle was assembled. A "1," "4," or "5" means US assembly. "2" means Canada. "3" means Mexico. The NHTSA Vehicle Identification Number decoder at nhtsa.gov confirms it in seconds.
Check it before you sit down at the finance desk. If the dealer has added a "tariff adjustment" and the car was built in the US, you have a specific, verifiable fact to work with when you push back.
Dealers are more likely to remove or reduce dealer-added fees on models with available inventory at other lots. They're less likely to budge on low-supply vehicles where they know you'll find the same situation elsewhere. Know which category you're in before negotiating.
Can I refuse a dealer tariff adjustment fee? Yes. Dealer tariff adjustment fees are market adjustments. They go to the dealer's margin, not to any government obligation or manufacturer cost. You can refuse them or walk away. On low-inventory vehicles the dealer may not negotiate, but the fee is never required by law or by the manufacturer.
What's the difference between a destination fee and a dealer markup? Destination fees are set by the manufacturer, printed on the Monroney window sticker, and the same at every dealership selling that model. Dealer markups appear only in the buyers order, vary by dealership, and are negotiable. Both show up on your final paperwork. Only one is mandatory.
Are tariff costs already included in the MSRP? For most 2026 models, yes. Manufacturers raised prices to reflect tariff exposure. The average new car transaction price reached $49,353 in early 2026, up 10.4% year over year per Kelley Blue Book. A separate "tariff fee" from the dealer on top of that MSRP means the tariff cost is being charged twice.
If the new-car fee stack on a specific model is pushing your budget, searching for a 2 or 3-year-old version sidesteps the entire conversation. CarScout tracks used car price history by model and trim, so you can see what comparable vehicles have actually sold for rather than working from a manufacturer's list price that's already been revised upward twice this year.