Four Market Trends to Track if You’re Thinking About Buying a Car in 2025 | Global News Avenue

By 2025, car buyers’ journeys could be smoother, especially if they’re eyeing a new vehicle.

Cox Automotive, a software company that serves the automotive industry, said market trends have been shifting in favor of drivers recently and it expects this momentum to continue into next year.

Dealers are offering buyers bigger incentives and easier access to loans and credit, Cox said in Tuesday’s outlook note. Charlie Chesbrough, a senior economist specializing in the new car market, said that as the supply of new cars increases, the increase in new car prices has gradually slowed down recently.

“Seller strength has weakened,” Chesbrough said. “The affordability of the market is improving, and trend lines suggest further improvements may be possible in 2025.” (Cox said, however, that used car prices are not expected to fall further due to tight inventories.)

According to the Bureau of Labor Statistics’ Consumer Price Index report, both new and used vehicle price indexes fell year over year last month but were up from October levels. American Spending on cars is enough to drive retail sales Higher than expected in November.

Here are four major trends expected to drive the automotive market in 2025.

New car prices have stabilized.

Cox said the number of new cars in the U.S. has been growing for nearly three years, slowing price increases.

At the same time, prices are falling. According to Cars.com, the average price of a new car is now about $49,000, down from $50,300 in June 2023 (car), automotive digital market. Over the past two years or so, dealers have offered an increasing number of incentives, such as cash rebates and low-cost financing, according to Cox.

According to Cox, incentives accounted for 8% of average transaction volume in November; in 2022 it will be about 2%. (Nearly 10% before the outbreak.)

More compact models are coming soon.

Drivers seem to drive off the lot in their dream cars as they try to stay within their budget, Chesbrough said.

Cox said the sales share of compact cars has increased. Cox said compact sedans, compact SUVs and subcompact SUVs are seeing growth, with an average selling price of $33.570 in 2024; as of November, the average price of non-electric conventional vehicles was just over $48,000.

Shoppers looking for lower prices should have more choices in 2025. Cars.com said the number of new cars priced under $30,000 increased 42% in November from a year earlier.

Used car prices are unlikely to fall due to tight supply.

Cox said dealers are unlikely to lower prices on used cars as they become harder to find.

Jeremy Robb, senior director of economics and industry insights at Cox, said dealers acquire a large portion of their used inventory by acquiring vehicles off lease. Rob said that in 2021 and 2022, overall vehicle production is down due to pandemic-related disruptions, the number of leased vehicles has dropped significantly, and the number of vehicles coming off lease and available for sale is not expected to normalize until at least April 2026. change.

Meanwhile, he said used car prices have been rising almost every week since September.

The future of electric vehicles is bright.

Prices for electric vehicles are up 1.4% year over year, but dealers have generally offered bigger discounts on these vehicles for months and discounts are not expected to disappear, Cox said. The company said the current average incentive amount is close to 15% of the average price.

“Incentives and rebates have played and will continue to play a significant role in driving down the price of electric vehicles,” said Stephanie Valdez Streaty, director of industry insights at Cox.

Valdez Streaty said the cost of electric vehicles could drop some because production costs for the batteries they rely on are expected to decrease.

Cox economists say electric vehicles could perform better than some expect if incoming President Donald Trump follows through on his promise to cut incentives for electric vehicles. Economists say policy changes are unlikely to happen before the second half of 2025, and states may continue to offer benefits to people who buy electric vehicles.