New vehicle sales in the US are anticipated to achieve their highest levels since 2019 next year, buoyed by falling interest rates and ongoing economic momentum from separate assessments by CarMax's unit Edmunds and Cox Automotive. Sales are projected to rise 1.4% year-over-year to 16.2 million units in 2025, up from an estimated 15.98 million for 2024, as noted in the Edmunds report published Tuesday.
Jessica Caldwell, head of insights at Edmunds, stated, "The market has become a slightly friendlier place for car shoppers than it was at the start of the year." Consumers are likely to experience some relief from the Federal Reserve's easing monetary policies, with a third consecutive interest-rate cut anticipated later today, according to Edmunds.
With economic optimism under the new Trump administration, some consumers could be more inclined to purchase new vehicles as they approach 2025. Additionally, a potential removal of federal electric vehicle tax credits is expected to create a short-term spike in purchases; however, sales may decline once these credits disappear.
"Analysts convey that even if implemented, policy-related sales inhibitors are unlikely to exert their full impact in the short term, permitting some market momentum to persist," the firm reported. "Nevertheless, in the long run, automakers might need to explore more innovative strategies to alleviate costs for buyers." Anticipated tariffs may further widen the already significant price gap between new and used vehicles, potentially pushing more cost-conscious buyers toward used options, as per Edmunds.
Ivan Drury, director of insights at Edmunds, remarked, "It’s impossible to predict which policy changes might be enacted starting in January, but if you're aware that you'll need a new vehicle in 2025 and want to hedge your bets, it wouldn’t hurt to begin shopping now. In particular, for those interested in an EV, taking action within the next month is likely a prudent strategy." In a different report released the same day, Cox Automotive projected that new vehicle sales would increase by 3% year-over-year to 16.3 million units next year, supported by elevated inventory levels and enhanced affordability.
The firm also anticipates that the retail used-vehicle market will grow on an annual basis despite limited inventory, predicting used sales to reach 20.1 million units, the highest since 2021. The US experienced record EV sales in 2023 and is forecasted to "achieve this milestone again" this year, according to Cox Automotive.
The company predicts that one in every four vehicles sold next year will be electrified, with the proportion of EVs expected to rise to about 10% in 2025 from an estimated 7.5% this year. "The growth in recent years has been gradual and at times uneven, but we remain steadfast in our conviction that US EV sales will follow a consistent long-term upward trajectory," stated Cox Automotive..