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After four years of tumult, the car market is finally starting to resemble normalcy – at least in terms of seasonal price fluctuations and dealership lot inventory. Yet, as any car shopper knows, new car prices remain high. Over the past five years, new car prices have surged by 27%, and remain just shy of the record highs we saw in late 2022. So, will car prices drop in 2025? To get a glimpse of what’s ahead, CarEdge co-founder Ray Shefska, who has four decades of industry experience, shares his 2025 car market predictions. Here’s where the new and used car markets are headed in the new year.
A recent survey by Edmunds found that nearly half of all new car shoppers aim to spend $35,000 or less on their next vehicle. Considering that the average transaction price for a new car was $47,870 in mid-2024, there’s a mismatch between what consumers want, and the cars that automakers are trying to sell.
However, there are signs the market may be tilting back in favor of consumers. After years of growth, new car sales have leveled off. In the second quarter of 2024, sales were up just 0.1% from the previous year.
At the same time that new car sales are beginning to stagnate, automakers are turning to incentives to bring buyers in. The most recent numbers from Cox Automotive show that manufacturer incentive spend as a percentage of selling price is at the highest level since 2021. Auto industry analysts largely expect incentives to continue to grow in 2025.
CarEdge’s Ray Shefska says that automakers will be pressured to lower prices one way or another. “They don’t like to lower MSRPs, it’s almost seen as a sign of defeat. But what automakers are more than willing to do is increase incentives. That’s exactly what I expect to see in 2025.”
In early 2025, tariffs on imports from Mexico, Canada, and China are on the table. Tariffs will impact certain automakers significantly more than others. General Motors, Ford, and Volkswagen Group are expect to be hardest hit by up to 25% tariffs on North American countries. These automakers have a major manufacturing presence in Mexico and Canada.
Automakers are expected to pass added costs on to consumers, but not just in the form of price hikes. Incentives will likely vanish for impacted models once the costs of tariffs are a reality. This means higher financing APRs, fewer cash discounts, and less attractive lease terms are all possibilities in 2025.
For a full breakdown of how tariffs will impact car prices, check out this deep dive.
Another shocking finding from the Edmunds survey is the staggering number of new car shoppers who are expecting zero percent financing, even in today’s high interest rate environment. The survey found that more than a third of new car shoppers are targeting interest rates between 0 and 3%. Yet in reality, zero percent financing made up just 4% of all new cars financed in July 2024. You can see this month’s only 0% APR offers here.
Fortunately for buyers, interest rates have started to ease. This is indeed great news. However, the looming threat of tariffs has led to a slowdown in rate cuts. And then there are the recession fears that won’t seem to go away. Some economists worry that the Fed has been slow to cut rates, which could negatively affect the broader economy. If a recession hits, the entire auto market could change with little advance notice.
Assuming all goes well with the economy, interest rate will continue a slow decline in 2025. As rates drop, captive lenders (those tied to automakers) are in a prime position to attract more business. In fact, it’s a trend that is already underway according to recent data from Experian. Captive lenders can offer low-APR or even zero percent financing deals because manufacturers reimburse them for the difference. This explains why car buyers often face a choice between a low-APR deal or a cash discount—the cost to the automaker is about the same.
Looking ahead to 2025, we expect to see more of these financing and cash offers and even stronger lease deals, as automakers work to maintain sales momentum. MSRPs are unlikely to fall, but the average new car selling price will drop due to big incentives. This is highly likely for the new cars with the most inventory.
👉 Stay on top of the best new car incentives here
In 2024, electric vehicle market share hovered between 7-9% of new car sales in America. In 2025, we expect the slow but steady growth in EV sales to continue.
With outstanding EV incentives and growing charging networks drawing the interest of more car buyers, an EV slowdown is unlikely. Adding to the interest are dozens of electric models joining legacy automaker lineups for 2025. As of today, there are 57 electric models on sale in the United States. By mid-2025, that figure will surpass 70.
Tesla’s EV market share has fallen below 50% for the first time ever. As Tesla CEO Elon Musk continues to create a polarizing image around the company, all signs point towards a continued gradual decline in Tesla’s market share. Car buyers have plenty to choose from these days, and the opening of the Tesla Supercharger network accelerates this trend.
In 2025, we expect battery electric vehicles (full EVs) to make up 9.5% of new car sales in the United States. This would be a slight improvement from 2024. EV prices will remain near current levels, at least when looking at MSRPs. We predict that EV incentives will continue to grow, bringing the average selling cost for a new electric vehicle down to $53,000 in 2025.
In 2024, we forecasted that new car prices would stay high, and unfortunately, that’s exactly what happened. Despite rising consumer resistance, automakers kept prices near all-time highs, relying on a combination of limited inventory and inflated production costs. But the tide is turning.
Looking ahead to 2025, the market dynamics are shifting. Automakers won’t be able to hold out against consumer pushback forever. With incentives increasing and interest rates dropping, the conditions are ripe for prices to start coming down. CarEdge’s Ray Shefska forecasts a gradual 3-5% drop in new car prices by late 2025 as automakers ramp up incentives to move inventory in the face of consumer pushback. However, select models, especially from Ford, GM, and Volkswagen Group, could see prices forced higher by tariffs on Mexico, Canada, and China. The longer tariffs persist, the greater the impact will be on consumer wallets.
These discounts and incentives will be the key to lowering prices, as manufacturers find themselves under pressure to respond to both rising new car inventory and economic shifts. It would be a welcome surprise if more than a few official MSRPs are lowered, but we don’t expect to see that. Automakers are more keen to increase incentives rather than lowering MSRPs for all.
Tariffs withstanding, car buyers should expect bigger incentives in 2025. This includes higher cash discounts, and more zero-percent financing deals. For those who prefer to lease, today’s best lease offers will only get better in 2025. There are already several cars and SUVs available to lease for under $200/month. In 2025, we expect even more.
In 2019, the average used car selling price reached $20,000 for the first time. In the current era, the average used car selling price been stuck around $25,500 to $26,500 for months. We track used car prices weekly, and we’ve noticed a worrisome trend: used car prices are not falling further. The used car market is much more difficult to forecast for 2025, with multiple factors converging all at once. Still, there’s a glimmer of hope for lower used car prices ahead.
The case for lower used car prices in 2025 leans on one particular dynamic: with new car incentives on the rise and zero percent financing becoming more common, more would-be used car buyers will be flocking to the new car lots in search of more reasonable loan terms. As a result, the demand for used cars may drop enough to soften prices.
Sadly, one lasting impact of the pandemic remains in the auto market: a shortage of used cars. When automaker shortages slowed sales to a crawl in 2021 and 2022, fewer new cars entered the market for an extended period. Skip ahead to 2024 and 2025, and the lasting impact is far fewer used cars hitting the market than we’re used to. This acts as upward pressure on used car prices, despite other market forces working in the opposite direction.
Tariffs will impact the used car market if they continue for an extended period. If tariffs drive new car prices higher, more buyers will pivot to the used car market. Higher demand for used cars would naturally drive prices higher. Keep an eye on used car price trends for the latest price movement.
CarEdge Prediction: Used car prices will be stable in 2025, with very slight movements reflecting the typical seasonal trends. We predict that the average selling price for a used car will remain near $25,500 in 2025.
Predictions are tough, especially when it comes to the auto market. The above car market forecasts make numerous assumptions about the state of the economy, interest rates, and consumer preferences. Of course, wildcard scenarios could drastically alter the course of the car market in 2025. Here are a few of the things we’re watching for in the coming year:
These are just some of the many unknowns that could impact the U.S. auto market in 2025. What do you think? Will car prices fall in 2025 as predicted, or will manufacturers and car dealers find a way to push prices ever higher? Let us know in the comments below.
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We’re just a few months from 2025, yet 2.2 million cars and trucks from the 2024 model year remain on dealership lots. While some car buyers may be tempted to wait for a 2025, others see the abundance of 2024s as a golden opportunity to negotiate a deal.
For this market update, we used CarEdge Insights to identify the new cars with the most remaining 2024 inventory as a proportion of their total inventory in September. We also factored daily sales rates into our rankings, with the goal of identifying which cars are truly the most negotiable. These models, with high supply and growing competition from incoming 2025s, are on track to sell at steep discounts as year-end sales approach.
Ford is grappling with a severe oversupply of 2024 Escapes as the year races to its conclusion. Although 2025s have only started to trickle in, Ford and its dealership network are facing mounting challenges with increasing inventory. With 47,000 units in stock and 146 days of supply at current selling rates, dealers will be increasingly eager to sell these crossovers with each passing day. Sadly, this classic compact crossover is being discontinued next year.
The Jeep Grand Cherokee comes in second with nearly 39,000 2024s still on the lot. With over 6,000 2025 models shipped and more rolling in, dealers are ready to make deals to move these 2024s. If you’ve been eyeing a Grand Cherokee, now might be the time to negotiate.
The Nissan Frontier is a mid-size pickup offered at bargain prices. Despite its affordability, the Frontier is a slow-seller. With over 14,000 units of the 2024 Frontier remaining, dealers are motivated to clear out inventory before even more 2025s arrive. One out of every four Frontiers on the lot is already a 2025 model, a statistic that is increasing with each passing day.
The Ram 1500 is consistently a best-selling truck, but even this popular pickup has a surplus of 2024 inventory. With over 8,000 2024 units remaining, dealerships are eager to move these trucks to make way for 2025s. This makes it a perfect time for truck buyers to negotiate.
The GMC Sierra 1500, a favorite among the full-size truck crowd, has a large stock of 2024 models waiting for buyers. With over 34,000 2024s still unsold, there’s room for negotiation, especially as more 2025 trucks hit the market.
The Nissan Rogue was once a top-selling compact SUV, but in 2024, it is piling up on dealer lots. With over 37,000 units of the 2024 Nissan Rogue still available, it’s one of the most negotiable vehicles right now.
The Hyundai Tucson, one of the best-selling compact SUVs in the country, is another model with a surplus of 2024 inventory. With over 24,000 units of the 2024 Tucson still on sale, buyers have a great chance to negotiate big savings.
If you’ve been thinking about a Hyundai Santa Fe, you’re in luck. With over 17,000 units of the 2024 model still in stock, there’s plenty of opportunity to score a deal. With nearly 14,000 2025 models already at dealership lots, now is a prime time to negotiate the aging inventory.
The Kia Sorento, known for its refreshed exterior and affordable price, has over 8,600 units of the outgoing 2024 model still available. With the arrival of nearly 20,000 updated 2025 models, the 2024 Sorento is highly negotiable right now. Whether you’re looking for a new family SUV or a daily driver, this could be your chance to get a great deal.
The Chrysler Pacifica, one of the few remaining minivans on the market, still has over 11,000 units from the 2024 model year on lots. If you’re in need of a family vehicle with space for eight, now is a great time to negotiate on the Pacifica.
With millions of 2024 models still on dealer lots and 2025 models arriving daily, there’s no better time to negotiate a great deal on a new car, truck, or SUV. At least that’s the case if you don’t mind missing out on features and perks that are new for 2025. Year-end sales are always your best chance for a new car at clearance prices.
If you’re ready for car buying pros to negotiate the best price on your behalf, let CarEdge Concierge handle the legwork for you. We’ll help you save time, money, and frustration while securing the best deal on your next vehicle. Prefer a DIY car buying tool? Learn more about CarEdge Insights, your key to unlocking behind-the-scenes car market data.
Just months after hitting the market, Honda, one of the last major automakers to go electric in the American market, is now out-selling its competitors. To say that the 2024 Honda Prologue has been a success would be an understatement. Is Honda’s first EV in America worth the hype? Here’s how the Honda Prologue compares to electric offerings from Hyundai, Kia, Toyota, Tesla, and other new arrivals.
Looking at the EV sales totals for the past 45 days (courtesy of CarEdge Insights), the Honda Prologue stands out at the top of the pack. This success is despite its recency, having been launched earlier this year. It’s also not cheap: the average selling price for a new Honda Prologue is $51,524, according to data from CarEdge Insights.
Of course, Tesla sells direct-to-consumer, and therefore we don’t have their data. Nor do we have numbers from Rivian, Lucid, or the now defunct Fisker. What we do have are fascinating insights that reveal who’s who in the U.S. electric vehicle market in 2024. at least among legacy automakers. Here are the top 10 EVs in America today, as measured by their 45-day sales total as of September 10, 2024. We’ve also included the current market day supply for each.
Did you know that Honda doesn’t manufacture the Prologue? As odd as it may sound, this is probably a good thing. In 2022, General Motors and Honda entered into a partnership that would help Honda leap into the EV space before it finished engineering its own electric powertrain. One year later, Honda backed out, but not before using GM’s Ultium electric powertrain for the Honda Prologue EV and Acura ZDX EV.
GM’s Ultium platform is good, but it’s not great. Ultium batteries power the Chevrolet Blazer EV, Equinox EV, the popular Cadillac Lyriq, and other models. The general consensus among owners and auto reviewers is that range, handling, and overall value are great. But for over $50,000, buyers should expect the latest and greatest technology. That’s not always the case with the Prologue.
Charging speeds are not miserable, they just aren’t on par with the competition from Hyundai, Kia, and Tesla. For example, a 20-minute charging session in a Hyundai IONIQ 5 is likely to take 30 to 40 minutes in the new Prologue. Performance aside, the Prologue is arguably the most normal-looking EV on sale today. It simply blends in with the crowd, as most Honda models do.
But the specs matter in the crowd of electric crossovers. Here’s how the 2024 Prologue compares to the top competition when it comes to range, charging speed, and price.
Despite sales success, Honda continues to aggressively discount the Prologue. According to Motor Intelligence, the average manufacturer incentive for the Prologue was $7,035 in July 2024. On top of the discounts, the Prologue qualifies for the $7,500 federal EV tax credit. GM manufactures the Prologue alongside the Blazer EV in Mexico.
This fall, the sales continue. Honda is advertising 0.9% APR for 60 months, or 2.9% APR for 72 months. Current Honda owners also get $1,000 in Honda Loyalty Cash. Leasing the Prologue is a sweet deal, too. Lease the Prologue AWD EX from $289/month for 36 months with just $2,999 due at signing. See the best new car deals this month.
The Prologue is not going to last forever, at least according to Honda’s own plan for its next-gen EV platform. In July 2024, Honda and Sony announced that they will share the EV architecture from the upcoming “Honda 0” EV series, which is expected to arrive in 2026.
Should you buy the Honda Prologue as your first EV? It’s certainly worth the test drive. If an EV that blends in with the other crossovers on the road appeals to you, the Prologue is right up your alley. Just don’t forget that you have more options to choose from than ever before.
Here’s your one-stop guide to every electric vehicle currently on sale in the United States, plus a sneak peek at the models coming in 2025. Whether you’re eyeing a crossover, 3-row SUV, or an electric pickup truck, this comprehensive list has you covered. We’re keeping this page fresh with regular updates, so check back often as new models hit the market.
Coming in 2025:
Coming in 2025:
Audi Q6 e-tron
Cadillac Optiq
Faraday Future FF91
Lotus Eletre
Maserati Grecale Folgore
Mercedes-Benz G-Class EV
Porsche Macan EV
Volvo EX30
Coming in 2025:
Hyundai IONIQ 7
Jeep Wagoneer S
Jeep Recon
Coming in 2025:
Cadillac Escalade IQ
Cadillac Vistiq
Land Rover Range Rover EV
Volkswagen ID.Buzz (Minivan)
Volvo EX90
Coming in 2025:
Ram 1500 REV
Coming in 2025:
Volkswagen ID.7
Coming in 2025:
Audi A6 e-tron
Cadillac Celestiq
Polestar 4
Polestar 5
Coming in 2025:
Dodge Charger Daytona
Lotus Emeya
Maserati GranTurismo Folgore
Tesla Roadster
Check back for monthly updates, as we’ll be adding new models as they’re announced. In the meantime, see the latest EV sales totals and market share in the United States.
Did you know that depreciation makes up the biggest portion of the total cost of car ownership? When it comes to buying a new car, it’s important to consider how well it holds its value over time. Depreciation is the difference between the original sales price, and what the vehicle will be worth in the future. Some vehicles depreciate faster than others.
In this 2024 update, Toyota continues to dominate the list of cars with the best resale value, with multiple models making an appearance. Honda follows closely, proving once again that both brands know how to build cars that hold their value. Let’s take a look at the top contenders in terms of resale value in the first five years of ownership.
5-Year Residual Value: 75%
The Jeep Wrangler has long been known for its ability to retain value. After five years, it’s expected to depreciate just 34%, leaving you with a resale value of around $38,610 if you buy at today’s average selling price of $58,209. For off-road adventurers, the Wrangler’s value retention makes it a solid investment. See our full depreciation breakdown.
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5-Year Residual Value: 74%
After a what feels like a lifetime, the 4Runner is getting a big refresh for 2025. We see no reason to worry about this legend’s reliability with the refresh, nor any damage to it’s phenomenal resale value.
Under normal ownership conditions, the Toyota 4Runner will depreciate just 39% after five years under normal use. With today’s average selling prices, this results in a resale value of about $31,593. If you’re looking for an SUV that holds its value while offering reliable performance, the 2025 4Runner should be on your short list. See our full depreciation breakdown.
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5-Year Residual Value: 74%
The Land Cruiser is back after a short hiatus. As expensive cars sadly become the norm, it makes sense that Toyota would resurrect their luxury SUV with impressive off-road prowess. It’s quite expensive, especially for a Toyota. Today’s average selling price is a hair north of $73,000. After five years, the Land Cruiser retains 74% of its value, with an estimated resale price of $44,791. The time-tested Land Cruiser is a prime choice for anyone looking for a high-end SUV that keeps its value. See our full depreciation breakdown.
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5-Year Residual Value: 73%
With a 5-year depreciation of just $10,127, the Toyota RAV4 is another excellent option for those looking for cars that hold their value. After five years, the average residual value will be around $27,520, making it one of the most practical choices for compact SUV buyers. See our full depreciation breakdown.
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5-Year Residual Value: 73%
The Honda HR-V, the #3 crossover in America in terms of sales, retains 73% of its value after five years. Considering an average selling price of $29,164 when new, the average resale value after 5 years comes out to $21,266. It’s a great option for those who want a smaller SUV that still holds its value well. See our full depreciation breakdown.
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5-Year Residual Value: 72%
The Honda CR-V is a top performer in the small SUV segment, losing just 28% of its value after five years. That leaves CR-V owners with an estimated resale value of $22,354 when starting at an average selling price of $38,461. The Honda CR-V is not just reliable; it’s a smart financial choice for those who care about SUV resale value. See our full depreciation breakdown.
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5-Year Residual Value: 72%
They say it’s shockingly fun to drive considering the attainable price point. There’s yet another reason to love the Miata: low depreciation. The Mazda MX-5 Miata retains 72% of its value after five years, with an expected resale price of $23,885. Brand new, the MX-5 Miata sells for $36,239 on average as of 2024. Known for its sporty handling and fun driving experience, the Miata is one of the top choices for sports car buyers who also want excellent resale value. See our full depreciation breakdown.
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5-Year Residual Value: 72%
The Toyota Tacoma is arguably the best pickup truck on the road for holding its value. After five years, it retains 72% of its value on average. That means after a new selling price averaging close to $47,000, buyers can expect a resale price of around $34,000 after five years. Its combination of reliability, durability, and value makes it a standout among mid-size trucks. See our full depreciation breakdown.
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5-Year Residual Value: 72%
The Toyota Corolla proves that compact sedans can retain their value exceptionally well. With a 5-year depreciation of just 28%, a new Corolla purchased today is expected to retain 72% of its value. Its resale value, low cost of ownership and excellent fuel efficiency help the Corolla sedan survive the modern era’s shift to SUVs and crossovers. See our full depreciation breakdown.
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5-Year Residual Value: 72%
No longer available as a sedan, the Impreza is officially a hatchback for 2024 and 2025. The Subaru Impreza holds onto 72% of its value after five years, with an expected resale price around $19,882. Subaru’s reputation for reliability and standard all-wheel drive make the Impreza a smart choice for those looking for value retention in a sedan that can handle every season. See our full depreciation breakdown.
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When it comes to finding cars that hold their value, these cars, trucks, and SUVs are at the top of the list. Time and time again, Toyota and Honda continue to dominate. For 2024 and 2025, other brands like Subaru and Mazda also offer strong contenders for those who shop with resale value in mind.
Need help finding the perfect car with great resale value? Let CarEdge Concierge do the negotiating for you. We’ll help you find the best deals, negotiate the price, and even deliver your new car to your door. Learn more about CarEdge’s car buying service.
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