Analysts recap 2024 and highlight trends they anticipate will shape the automotive industry in the year ahead
Santa Monica, Calif., Dec. 17, 2024 (GLOBE NEWSWIRE) — The car shopping experts from Edmunds forecast 15.98 million new vehicle sales in the U.S. for the 2024 calendar year, with 4,199,561 new vehicles expected to be sold in the fourth quarter of 2024.
2024* Prices and Interest Rates in the Rearview Mirror
- The average transaction price (ATP) for new vehicles was $47,465 in 2024, a 0.8% decrease compared to $47,851 in 2023, and a 27.2% increase compared to $37,310 in 2019.
- The ATP for used vehicles was $27,252 in 2024, a 5.4% decrease compared to $28,796 in 2023, but a 32.2% increase from $20,618 in 2019.
- The average annual percentage rate (APR) in 2024 for new vehicles was 7.1%, compared to 7.2% in 2023 and 5.9% in 2019.
- The average APR in 2024 for used vehicles was 11.4%, compared to 11.2% in 2023 and 8.7% in 2019.
* All 2024 data is based on January–November, with comparisons to other years using the same time period.
“Affordability (or lack thereof) in the new vehicle market was the recurring theme of 2024, but things started taking a more positive turn on the back nine as inventory continued to improve, stronger incentives trickled back into the market, and new vehicle interest rates declined after peaking in May,” said Jessica Caldwell, Edmunds’ head of insights. “Consumers are still feeling the pinch, but the market has become a slightly friendlier place for car shoppers than it was at the start of the year.”
2025 Forecast and Trends
Edmunds experts anticipate a very slight rebound of the auto market in the new year, forecasting 16.2 million new vehicle sales in 2025. This tally would represent a 1.4% increase from 2024 and the highest annual new vehicle sales figure since 2019.
Edmunds analysts offer a perspective on the top three trends they believe will shape the road ahead in 2025, along with some direct shopping guidance:
Trend #1: Ongoing economic momentum and potential consumer optimism could give sales a lift.
- The Fed is expected to cut rates for the third time in a row in December 2024, offering a bit more relief for consumers.
- Edmunds analysts note that some consumers might feel more optimistic about their economic prospects during the new administration, and therefore could be more open to making a new vehicle purchase heading into the new year.
“Consumers feeling energized about the incoming administration may be motivated to make a purchase, while those uncertain about the new leadership’s stance on policies might choose to hold off,” said Caldwell.
Trend #2: New federal policy could drive up overall vehicle costs and affect EV sales.
- The implementation of tariffs could dramatically increase vehicle prices since automakers can only absorb so much of tariffs’ cost. Depending on the severity of these tariffs, what the automakers cannot absorb will be passed along to consumers who are already struggling with current new vehicle prices.
- Edmunds experts note that the potential elimination of federal EV tax credits would likely cause a short-term boost in EV purchases, but once the credits are removed, EV sales will likely suffer.
- Analysts say the good news is that even if implemented, policy-related sales inhibitors are unlikely to take full effect in the short term, allowing some market momentum to continue. But in the long term, automakers might need to turn to more creative solutions to help reduce costs for shoppers.
“The tariffs proposed by the incoming president might not be more than negotiation tactics, but if they were enacted they would likely affect the costs of nearly all goods and services — not just car prices,” said Caldwell. “Consumers would have less disposable income and automakers would likely need to increase incentive spending just to move metal. Things could get interesting if automakers consider stop-gap solutions such as reviving used vehicle leasing or subscription services, or devising completely new models in order to offer vehicles at less cost to the consumer.”
Trend #3: Despite fluctuations in supply, used demand could get a boost.
- The implementation of tariffs could further stretch the already record price gap between new and used vehicle prices, pushing even more price-sensitive shoppers toward the used market.
- Depressed lease volumes in 2022 (less than 20% of transactions) and low overall sales (13.8M, near recession levels) will constrain the supply of near-new used vehicles in 2025.
- Older trade-in vehicles from holdout car buyers could alleviate supply shortages and ease pricing pressures for older used cars.
“After somewhat normalizing in 2024, the used market looks like it will once again be subjected to the push and pull of opposing market factors in 2025, which will inevitably drive fluctuations in prices,” said Ivan Drury, Edmunds’ director of insights. “Whether you’re planning on selling a vehicle or purchasing used, checking local prices and getting an appraisal for your trade-in from a site like Edmunds is going to be critical to ensuring you’re maximizing value.”
Year-End Car Shopping Advice
Edmunds analysts note that consumers might want to move up their purchasing timelines in light of the uncertainty surrounding the incoming administration’s expected policy changes.
“It’s impossible to predict which policy changes might be implemented starting inJanuary, but if you know you’re going to need a new vehicle in 2025 and prefer to hedge your bets, it wouldn’t hurt to start shopping now,” said Drury. “In particular, if you’re in the market for an EV, acting within the next month is probably a smart move.”
About Edmunds
Edmunds guides car shoppers online from research to purchase. With in-depth reviews of every new vehicle, shopping tips from an in-house team of experts, plus a wealth of consumer and automotive market insights, Edmunds helps millions of shoppers each month select, price and buy a car with confidence. Regarded as one of America’s best workplaces by Fortune, Great Place to Work and Built In, Edmunds is based in Santa Monica, California. Follow us on TikTok, Twitter, Facebook and Instagram.
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CONTACT: Talia James-Armand Edmunds 310-491-8738 pr@edmunds.com
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