Prime Highlights:
Used vehicle prices are expected to rise by 1.4% in 2025, continuing the stabilization trend observed in 2024.
Used vehicle sales are forecasted to rise by 1% in 2025, totaling 37.8 million units, with retail sales increasing by 1.2%.
Key Background:
Used vehicle prices are forecasted to maintain a steady trend in 2025 after a period of significant volatility, according to Cox Automotive. Following the sharp pricing swings caused by the pandemic and its aftermath, the market began to stabilize in 2024, and this trend is expected to continue into the new year.
Cox Automotive, a prominent auto data and logistics firm, predicts that the wholesale prices on its Manheim Used Vehicle Value Index will increase by 1.4% by the end of 2025, marking a slight rise compared to the 0.4% increase observed in 2024. This follows a tumultuous period in 2022 and 2023, where prices fell by 15% and 7%, respectively, after the sharp inflationary spikes during the pandemic. In contrast, prices surged by a historic 46.6% in 2021 and 14.2% in 2020, driven by supply chain disruptions and limited new vehicle availability.
The stability in pricing represents a positive development for consumers. However, used vehicle prices remain higher than pre-pandemic levels, with Cox reporting that the average price of a used car was $25,565 at the start of December 2024, a slight increase from the previous month but a 3% drop compared to the same period in 2023.
Despite the overall price stabilization, month-to-month fluctuations are expected due to seasonal trends and other influencing factors. Cox Automotive anticipates that the used vehicle market will see a 1% increase in total sales in 2025, reaching 37.8 million units, with retail sales projected to grow by 1.2%, totaling 20.1 million units.
Jeremy Robb, Cox Automotive’s senior director of economic and industry insights, emphasized that while the pandemic’s extreme effects on the market are gradually dissipating, some volatility may still occur. However, Cox’s long-term data suggests that average annual price increases typically average 2.3%, excluding the extraordinary pandemic years.
