Used vehicle sales are expected to increase in 2025, nearing 38 million.
In its 2025 Forecast released Tuesday, Cox Automotive predicted a 1 percent increase in used vehicle sales, with total sales topping out at 37.8 million. The forecast for used retail sales includes a 1.2 percent rise to 20.1 million sales.
The used vehicle market forecast was part of an overall positive outlook for the vehicle industry as interest rates are expected to decline, access to capital increases, and the labor market remains strong. New vehicle sales are expected to grow by 2.8 percent to 16.3 million.
“Instead of a slowing economy, we have a stabilizing economy and most importantly, a stabilizing labor market,” said Cox Automotive Chief Economist Jonathan Smoke. “We can stop fretting about a soft landing and acknowledge we are still flying. We’ve navigated restrictive rates, slowing job growth and increasing unemployment. But as we end 2024, momentum is back on our side.
“We’ve gone from the dominant conventional wisdom being it is better to wait to buy when supply and incentives will be higher and rates will be lower at some point in the future to psychology shifting to worries that inflation could return driving rates higher and tariffs could add to prices and disrupt supply chains. Buy now or at least sooner rather than later seems to be the new marching cry.”
Heading into the new year, used vehicle inventory remains tight. Cox Automotive’s vAuto data shows days of supply at 46 days, down 8 percent from the end of 2023.
“At this time of year, we’re much tighter than we normally see,” said Jeremy Robb, Cox Automotive’s Senior Director of Economic and Industry Insights.
Inventory is expected to be tight through 2025. Robb pointed out the lack of leases during 2021 and 2022 and now fewer lease returns entering the wholesale and used retail market is adding to the inventory constraints. Robb said the lack of off-lease vehicles entering the market will continue through April 2026.
The impact of the lack of off-lease vehicles will be felt in the certified pre-owned market. CPO sales are expected to drop 1.6 percent in 2025 to 2.5 million.
Retail used vehicle sales are ending 2024 up 13 percent from December 2023. In the 30-day average, sales have been above 2023 since August.
“Lately sales have ticked up and we’re running seasonally stronger than we usually see, averaging more almost 1.7 million transactions per month,” Robb said. “We’re seeing more strength than seasonally normal and sales are up double digits against the same time last year. We expect the full year to be up 3 percent year over year. With interest rates just starting to come down, we would continue to expect to see more transactions in the market as buyers step in.”
