2025 will be the best year for new vehicle sales since before the pandemic

This year has been pretty good for sales of new vehicles.  Cox Automotive and Edmunds, two companies that track the industry, both expect that 16.3 million new cars and trucks will have been sold once 2025 wraps up.

That’s the most in any year since 2019. And it's come in a pretty chaotic year for the auto industry.

President Donald Trump’s tariffs threw carmakers for a loop. So did Congress's cancellation of the electric vehicle tax credit.

But those actions also pushed more consumers to go out and buy new cars.

The headlines all through the spring basically told consumers: The price of cars is going up soon.

President Trump was putting a 25% tariff on all imported vehicles. Eventually, he cut those import taxes, but car buyers heard all of that news and rushed to dealerships.

“Buyers are looking at these vehicles in 2025 as being less expensive than they'll ever see again,” said Sam Fiorani with AutoForecast Solutions.

The same thing happened a couple of months later when Congress set the end of September as the end date for federal EV tax credits. 

“The loss of the EV tax credits not only encouraged people to buy EVs in the second and third quarter of this year but also may have pulled some more people into the market who just saw all the news in the auto industry” and came in and bough hybrids and gas cars too, said Fiorani. Tons of EVs sold in the late summer, but non-EVs also did well. 

But each of these moments of surging sales in reaction to policy changes was temporary.

“I think at the end of the day, it's really masking this transformed market that's really becoming more structurally smaller and wealthier,” Stephanie Valdez Streaty, director of industry insights at Cox Automotive.

If you listen to “Marketplace” a lot, you’re probably tired of hearing this phrase: “the K-shaped economy.” And we’re tired of saying it. But it really is a good way to describe the new car market. 

The average price of a new vehicle is around $50,000. 

“Wealthier consumers are able to still buy those vehicles, and meanwhile, lower income are either being pushed out or, you know, really going towards [the] used vehicle market,” Valdez Streaty said.

That trend could continue next year. Valdez Streaty expects new vehicle sales to decline slightly, with the average new car remaining pretty expensive.

 But carmakers might be OK with that. 

“I am convinced at this particular point in time that the manufacturers are perfectly content with keeping prices high,” said Ray Shefska, co-founder of the car buying site CarEdge.

Despite carmakers selling fewer new vehicles than before the pandemic, they’ve still done pretty well without rolling out many new models aimed at lower-income consumers.

“They talk about affordability and that they need to address it, but we don't really see the efforts to match those words,” Shefska said.

And even if they do start developing more affordable cars, it will take years to bring them to market.