2025 CAR MARKET UPDATE (New/Used Cars) Kevin Hunter The Homework Guy
What to Expect When Buying a New or Used Car in 2025 and 2025 Car Market Update Report by Kevin Hunter The Homework Guy. THG brings the best Hassle Free Car Buying Service in the USA and God Bless America!
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Today, we're talking about what you can expect when buying either a new or used car in 2025. While some of this will be familiar to our regular fans, a lot has changed in the car market over the past few years, and that means new opportunities for you guys this year. Opportunities that you haven’t had for a few years.
Inventory Levels Are Stabilizing. Finally! Yes, let’s talk about inventory. The pandemic and global chip shortage of the early 2020s created a nightmare scenario for anyone trying to buy a car. In the last few years. dealership lots were empty, and customers were paying over MSRP for models that were once heavily discounted. The good news? As we enter 2025, those inventory issues have largely stabilized, and market adjustments have pretty much disappeared, except for a small handful of extremely insane car dealers.
Manufacturers have ramped up production, and supply chain bottlenecks have eased everywhere. You’re sure to see a healthier selection of vehicles on dealer lots this year. However, some high-demand models, like EVs and
hybrids, may still experience shortages, so plan accordingly if you’re in the market for one of those.
Sadly, Prices Are Still Generally High
Now, here’s the reality check. While inventory levels are improving, prices haven’t exactly plummeted. New car prices remain high compared to pre-pandemic price levels. The average price of a new vehicle in late 2024 hovered around $48,000, and we’re not seeing any significant drops coming in 2025.
Why? Like their dealerships, Automakers are focusing on profitability over volume. They’ve shifted their strategies to prioritize high-margin models like SUVs, trucks, and luxury vehicles.
Used Car Market: It’s Still A Mixed Bag
Let’s shift gears to the used car market. Prices for used cars skyrocketed during the pandemic, but 2025 is expected to finally bring some relief. With new car production stabilizing, more trade-ins and good lease returns are making their way to the dealership lots, increasing the supply of used vehicles.
That said, not all used cars are created equal. Be prepared to sift through your options carefully and pay close attention to the vehicle history report. Also, be wary of flood damaged cars. There sure were plenty of hurricanes this past year, and that means lots of flood damaged cars!
Also, certified pre-owned (CPO) vehicles are gaining popularity. While we often say they aren’t worth the extra money, CPO cars can come with manufacturer-backed warranties
Financing: Higher Interest Rates
If you’re financing your car purchase, brace yourself. Interest rates are still sitting significantly higher than they were a few years ago. If those rates start to drop, we’ll be the first to let you know. In 2025, the average APR for a new car loan is projected to be around 7% to 9%, and unfortunately, it’s even higher for used cars. This means you’ll pay more over the life of your loan unless you happen to have excellent credit.
To combat this, shop around for financing before you set foot in a dealership. Get pre-approved through your own bank or credit union, or an online lender to secure the best possible rate. If you happen to be a veteran, there are plenty of good options out there for you, like Navy Federal, USAA, and Pentagon Federal Credit Union (PenFed) to name a few…. And don’t forget—a bigger down payment can help reduce your monthly payments and overall interest. 20% down also eliminates any need for expensive dealer GAP insurance policy.