Car Market Update For New & Used Vehicles | Watch Before Buying | Fall 2025

Thinking about buying a car fall 2025? Here's the market update for new and used cars, as well as APRs, from your friends at Car Edge. Dad, let's jump right into it. New car market first. Here's the deal. Yes. Market day supply of inventory. It's around 73 days. Market day supply is something that we look at all the time. That means how many days it would take to sell all available new car inventory based on the current sales rate. A year ago, it was kind of similar to what it is right now. About 2.7 million vehicles in inventory. Now, Dad, the used, excuse me, the new car market is different depending on what brand it is. If you're in the market right now, fall 2025 for a Toyota or Lexus, good luck negotiating a big discount. Totally different story if you're for a Land Rover, a Ram, a Lincoln, an Audi, a Mitsubishi, these brands that have a ton of inventory. Exactly. Discounts are always based on availability. If a dealership has way too many vehicles on the lot, there's deals to be had. If there's more customers than there are cars, then those deals are much harder to come by. Yeah. And a little bit of what we're seeing at least in early fall would be the fact that EV tax credits go away at the beginning of October. So the new car market right now is kind of differentiated by brand as well as by powertrain. We've seen EVs kind of flying off the shelves as lease incentives have been really strong and as manufacturers have tried to sell these vehicles before tax credits end. So EV market, it's kind of like fire sale right now. Market day supplies drop significantly month over month, but the inventory situation for other powertrains, hybrid powertrains are the most popular, but other powertrains, hybrid and internal combustion engine kind of depends on the brand. Inventory sitting a little bit longer, you can get a better deal. I would say October, November, December, it's going to be very, very difficult in the EV space because, well, my guess is that most of those customers will have pulled themselves forward and bought a car by the end of September. Now the brands that have a lot of inventory right now, I mentioned some of them a moment ago. Land Rover has a lot of inventory, Ram, Lincoln, Audi, Mitsubishi, Dodge, and Jeep. These would be the brands where you can go in and you command the most negotiating leverage because those brands just have an oversupply of inventory. Now it can get make and model specific. Yes. So you really have to look at the particular models as well. We obviously provide the market day supply data in your neighborhood for any particular make and model back at caredge.com on the car search. But broadly speaking, these are the brands where you have the most negotiability because they have an oversupply of inventory. The higher the day supply, the better the opportunity for a deal. Now, another trend we're seeing in the new car market pops 2024 new vehicles still for sale in 2025. This is actually the time where 2026s are typically taking on the majority of new car inventory. Maserati, 30% of their inventory, 2024 new vehicles. Alfa Romeo, 25% of their new cars are 2024s. Dodge, 17% of new Dodges for sale are 2024s. Mitsubishi is 16% and even Ford, 7% of new Fords for sale nationwide right now are 2024s. So there's a lot of pressure on these dealers and these automakers to sell these new 2024s. That's another deal opportunity for customers. Oh, absolutely. And as you can see from the top three, Maserati, Alfa Romeo, and Dodge, well, those are all made by the same manufacturer, Stellantis. Opposite end of the spectrum, the brands that have a limited availability of inventory. It's kind of the same old song here. We've got Toyota, Lexus, and Honda. These Japanese automakers, really just the two of them, Toyota and Honda, they're struggling to supply their dealers with enough inventory. Although again, things here get make specific or excuse me, model specific. For example, Toyota actually has a fairly high oversupply of some of their pickup trucks. But more broadly speaking, pickup trucks just have a higher day supply. In the U.S., these are the brands where you're going to struggle to negotiate as much. Doesn't mean you won't get a deal below MSRP. We see that all the time back at caredge.com. That being said, it's just going to be a little bit more work. It's going to be a lot more work, but it can be done. Now, all that being said, the average transaction price for a new car is still really close to $50,000, $48,480. So new cars haven't gotten cheaper as we've gone through 2025. And I don't think our expectation is that new car transaction prices are going to go down significantly anytime soon. I wouldn't think so. And the reason I wouldn't think so is simply because we know that many of the 2026 model year prices are going to have a significant price increase. So naturally the dealer is going to say, well, this vehicle, this 2025 is already $1,000 cheaper than the comparable 2026. So dealers tend to not discount quite as much when they know that's happening. Now it could be a situation where a year from now, as you have lingering 2025s, just like we have lingering 2024s, maybe you're getting a deal on that then. But I completely agree with you. We've already seen manufacturers increase prices for model year 2026 vehicles, whether it be the actual MSRP or the destination charges of those vehicles. Either way, I don't think average transaction prices go down that much. Now, another thing we track up for new vehicles is what percentage the manufacturer is incentivizing based on the average transaction price of the vehicle. So right now that it stands at 7.3%. So that means if you were to buy a hundred thousand dollar vehicle, the manufacturers is providing you an incentive of $7,300, $7,300. This percentage actually went up only by 0.3% month over month. So if manufacturers were struggling as much as we say, they are viewed anticipate this number to rise even more, maybe in the fall, it does after a slower, slower period here. My guess is if we see it happen, we will see it happen closer to November, December, at the very end of the fourth quarter, when manufacturers typically offer the greatest amount of incentives. And by the way, at 7.3% of the average transaction price being incentives, that's still four to 5% below what was normal just four or five years ago. And it's kind of interesting, either manufacturers are choosing to increase their prices and maintain decent incentives, or they're not increasing their prices and they are decreasing their incentives. So it's an interesting conundrum right now for these automakers. One final call out on the new car market before we give it our overall grade for fall 2025 would be leasing. We're seeing more and more customers choose to lease vehicles than finance vehicles, and in particular lease EVs. So if you're new to the idea of leasing, definitely watch some of our other videos, how to negotiate a lease, our full leasing guide back on caredge.com. But leasing is becoming more popular as people are looking for a monthly payment that fits their budget. It is easier for manufacturers and dealers to get to a customer's monthly payment on a lease than it is on a purchase because well, realistically, when you're leasing, you're only paying for the depreciation of that vehicle over the term of the lease. Now, there are a couple brands that we'll call out here that we think represent a fair value in today's market. Nissan, Mazda, Hyundai, Kia, Honda, all these brands you can get discounts on. They have some inventory, even though Honda is pretty tight, there's still some discounts available there. And these brands, they haven't raised their prices too much yet, at least. So it's an opportunity for shoppers. In general, Dan, here at Car Edge, we're saying fall 2025, it's kind of there. Neutral, neutral. It's Switzerland, ladies and gentlemen. It's not a buyer's market. It's not a seller's market. It's pretty neutral in the new car market right now. Absolutely. I couldn't agree more. Okay. Let's talk about used cars, Dan. What's going on in the used car market. The average listing price for a used car right now, $25,527. So down significantly from our pandemic highs when the average transaction price or average listing price, excuse me, of a used car was close to $30,000. That being said, it is up just a little bit year over year. I don't think we anticipate seeing used car prices go up or down too much. We don't have that much quality used car supply and demand has been fairly strong. Yes. And they're still, even at a $25,527 price point as an average transaction price, it's still much, much higher than what it had been just five years ago. Now there's a 43 days supply of used car inventory. So compare that to the 73 days supply of new car inventory. So new car inventory is significantly greater than used car inventory right now. And that's why we continue to see pressure on, especially lower price point used cars. There's significant demand at a sub 20, sub $15,000 price point, but not a lot of good inventory options there. Well, typically there never is. But today the average mileage on trade-ins and used vehicles are much higher than they've ever been. North of 70,000 miles is the average number of miles on a used car for sale right now. That's in my day, that would have been a death knell. Now think about this dad, there's a 31 days supply of sub $15,000 used cars while the market was at 43. And again, new cars are at 73 or from Jeep, I've got a hundred plus days supply. So again, it gets really, really, really tight, which means how much negotiating leverage am I going to have when I go to get that quote unquote deal on that $12,500 used car? There's not a lot of other options out there. And so the dealer has a lot of leverage. The problem is that $12,500 used car, the dealer is asking $15,000 for it. And ultimately what that leads us to is for the used car market, it's a little bit more clear cut. It's more of a seller's market than a buyer's market on the used car side of things right now, just because, and we anticipate this will kind of be the case for the foreseeable future. We had, just as a friendly reminder, a couple of years ago, 10 million plus vehicles, new cars, not produced. There's no impact in the used car market, not to mention the fact that lease returns were brought back to dealerships. So we anticipate for a while it's going to be a little bit more of a seller's market than a buyer's market. The one bright side would then be, if you have a vehicle you're trading in, you have leverage there. So obviously go to caredge.com, track your vehicle value, make sure you're using that as negotiating leverage. But if you're just purely looking to buy a used car, especially a cheap or affordable used car, not a buyer's market, check the obituaries. Now, one big thing we have to touch on, dad, would be the annual percentage rate that folks are paying for auto loans. We know for used cars, it's north of 14% still, and for new cars, it's north of 9%. Now, manufacturers on the new car side are offering all sorts of incentives. You can get 0% financing on some vehicles that have, as you always like to say, 0% interest. But on the used car side, the average APR being 14%, that's expensive and leads to a really high monthly payment, keeping a lot of people out of the market right now. Oh, absolutely. The hope is, however, that all indications are the Fed's going to be cutting their Fed rate. So hopefully we will see the APRs drop. I wouldn't say dramatically, but any drop would be beneficial to the customers out there. And I do think for fall 2025, as we move forward, that is something to keep in mind. Maybe you don't buy in September. Maybe I buy in October or November. Obviously, if you're in the new car market, maybe you even wait all the way out till December. But rates should go down. How much they'll go down, if it's going kind of TBD, but we anticipate that the Fed funds rate will go down, which ultimately should drive down the interest rates that we're seeing on auto loans. It should be making those payments a tad bit more affordable. Now we've got the slides for today's video available. So just click the link in the description down below and always subscribe to the channel if you appreciate content like this and check out caredge.com for all the resources you need to save some time and some money. Thank you, Pops. Thank you. And then do it.