With car prices surging and tariff impacts creating market uncertainty, forward-thinking businesses are finding opportunity in vehicle reimbursement programs
The automotive landscape has shifted dramatically in recent months, and the ripple effects are being felt across corporate America. New data from Kelley Blue Book reveals that average car prices jumped 2.5 percent in April alone—the steepest monthly increase in five years—reaching an average of $48,699. Meanwhile, automakers are employing what industry analysts call “stealth price hikes,” quietly cutting incentives and raising fees even when sticker prices appear unchanged.
For business leaders already grappling with economic uncertainty, these trends present both a challenge and an unexpected opportunity to transform how their organizations approach vehicle programs.
The Hidden Reality of Rising Vehicle Costs
The numbers tell a stark story. Where automotive incentives once knocked 10 percent off vehicle prices, they’ve now shrunk to just 6.7 percent of the average sale. Zero-percent financing deals—a crucial factor for budget-conscious buyers—have dropped to their lowest levels since 2019. And according to automotive researcher Edmunds, delivery charges alone have increased by $40 to $400 across various manufacturers.
“On the consumer side, they’re seeing several thousand dollars of actual-experience price increase, whereas the factory is saying, ‘No man, we didn’t raise prices at all,'” Morris Smith III, a Ford dealer in Kansas, told Bloomberg News. “Stealth is a good word for it.”
These “invisible” cost increases stem from the 25 percent tariffs on imported vehicles that took effect in April, affecting everything from luxury European imports to popular crossovers built in Mexico. Even vehicles assembled domestically aren’t immune, as the supply chain relies heavily on foreign-made parts subject to additional tariffs.
The Corporate Fleet Dilemma
For companies operating traditional fleet programs, these market dynamics create a perfect storm of challenges:
- Unpredictable procurement costs as automakers navigate tariff impacts differently
- Extended depreciation concerns with rapidly shifting market values
- Insurance premium increases driven by higher repair costs from tariffed parts
- Capital allocation uncertainty amid volatile pricing environments
Cox Automotive predicts that vehicles directly affected by tariffs could see price increases of 10-15 percent, while even exempt vehicles may rise by 5 percent. For a company managing dozens or hundreds of corporate vehicles, these increases translate to significant budget pressure at a time when every dollar counts.
The Vehicle Reimbursement Advantage
Smart organizations are recognizing that current market volatility actually strengthens the case for transitioning from traditional company car programs to vehicle reimbursement models. Here’s why:
Cost Predictability in Uncertain Times
Unlike fluctuating vehicle purchase prices, reimbursement programs offer stable, budgetable costs based on actual business mileage. With Motus solutions, companies can achieve up to 40 percent savings over traditional vehicle programs while maintaining complete cost visibility.
Risk Transfer When It Matters Most
Vehicle reimbursement programs shift ownership—and the associated risks of depreciation, insurance, and maintenance—from the company to employees. In today’s volatile market, this transfer becomes even more valuable as individual vehicle values fluctuate unpredictably.
Enhanced Employee Satisfaction
Rather than restricting employees to a limited fleet selection with uncertain delivery timelines, reimbursement programs provide vehicle choice. Employees can select vehicles that meet their personal and professional needs while companies maintain cost control.
Tax Efficiency at Scale
Motus’s tax-advantaged reimbursement solutions, including Fixed and Variable Rate (FAVR) and Tax Advantaged Accountable Plan (TAAP) programs, ensure maximum tax efficiency regardless of external market pressures. These IRS-backed programs provide tax-free reimbursements while reducing administrative burden.
Beyond Cost: The Productivity Multiplier
The benefits extend beyond immediate cost savings. Motus customers typically see:
- 95% trip capture accuracy through automated mileage tracking
- 21 hours saved per employee annually on mileage reporting
- 3-12x improved visibility into risk footprint through integrated monitoring
These efficiency gains become particularly valuable when economic uncertainty demands maximum productivity from every business function.
Looking Ahead: Strategic Positioning for 2026
As business leaders develop strategies for profitable growth in 2026, the current automotive market disruption offers a unique window for transformation. Companies that transition to modern vehicle reimbursement programs now position themselves to:
- Avoid future procurement volatility by eliminating direct vehicle purchases
- Scale efficiently without capital-intensive fleet investments
- Attract talent through flexible, employee-friendly vehicle policies
- Reduce administrative overhead through streamlined, automated processes
The Path Forward
Market uncertainty doesn’t have to mean reduced efficiency or increased costs. With 92 percent of Motus customers achieving ROI within 12 months and processing $2 billion in reimbursements annually, the platform has proven its value across economic cycles.
As one Fortune 500 client recently noted: “In this environment, we needed complete cost predictability and risk mitigation. Our vehicle reimbursement program delivers both while actually improving employee satisfaction.”
For companies ready to turn automotive market volatility into competitive advantage, the solution is clear: Embrace the flexibility and efficiency of modern vehicle reimbursement programs.
Ready to explore how vehicle reimbursement can transform your organization’s approach to transportation costs? Learn more about Motus solutions at www.motus.com or connect with our team to discover your potential savings.
