2024 Auto Market Year-In-Review

The Auto Market in 2024: Big Wins, New Trends and What’s Next for 2025

2024 was a year of a moderate but consistent push toward recovery for the automotive world. After years of supply chain headaches, pandemic disruptions and economic uncertainty, things finally started looking up. New-car sales surged, the used market found some volatility settle, and electric vehicles continued their rapid rise. But as we head into 2025, new unknowns are coming into focus. Here’s a closer look at what’s been going on and what’s on the horizon.

New Cars: A Comeback With an Affordability Catch

The new-car market grew in 2024, with sales climbing 2.2% to 15.9 million units — finally bouncing back to pre-pandemic levels. Thanks to fewer supply chain issues, inventory nearly doubled from 2022, averaging 2.3 million cars per month, up 32%.

But while prices stabilized at $49,175, affordability is still a big hurdle. New-car prices are 29% higher than in 2019, and financing costs are hitting buyers hard. More than 62% of people are paying over $600 a month, and 35% are shelling out $800 –the same percentage of consumers in 2019 who had $600 payments when rates were lower. Entry-level cars under $30,000 saw a 63.5% jump in inventory, but luxury options over $70,000 are still growing, too, driven by high-end trucks and SUVs like the Ford F-250 and Chevrolet Tahoe.

Used Cars: Tight Supply, Big Changes

The used-car market showed signs of settling down, with prices dropping 4.9% to $28,819. That’s a relief after the inflationary spikes of the past few years. But inventory is still tight, down 1.2% year over year, with late-model vehicles especially hard to find (down 13.4%).

Instead, older, higher-mileage cars are becoming the norm — average mileage hit a record 60,233. Brands like Ford, Chevy and Toyota remain favorites for reliability, and there are more options under $10,000. But with fewer lease returns and a shrinking pool of newer used cars, 2025 could bring higher prices as supply tightens further.

EVs: Big Growth, Bigger Questions

The EV market had another huge year, with inventory growing 64% year over year and an eye-popping 490% from 2022. Prices came down, too —mostly due to lower demand and increasing competition, with models like the Ford Mustang Mach-E dropped 14% to $50,524, and other favorites like the Hyundai Ioniq 5, Kia EV6 and Nissan Ariya saw similar price cuts.

But oversupply is becoming a concern. New EVs spent an average of 85 days on dealer lots — 24 days longer than in 2023. Popular models like the Ford F-150 Lightning and Mustang Mach-E stayed even longer. And with federal tax incentives getting stricter in 2025 and the new administration possibly shaking up EV policies, automakers may have to rethink their strategies.

What’s Next for 2025?

Looking ahead, the big questions are:

• Will new-car prices become more affordable? Financing costs are still a major barrier for many buyers despite some recent help from the Federal Reserve with a percentage point of rate cuts.
• How tight will the used market get? With fewer cars under 6 years old expected, prices could climb, pushing more shoppers toward new cars.
• What’s the future for EVs? Stricter tax credit rules and potential policy changes could either slow adoption or shift demand in unexpected ways.

Automakers are in a tough spot, trying to balance production, pricing and consumer needs while keeping an eye on the economy and policy changes. One thing’s for sure: 2025 is shaping up to be a year full of surprises.

2024 was a year of recovery, growth and big shifts for the auto market. But the road ahead is anything but smooth. From tightening supply to affordability challenges and EV uncertainty, 2025 is going to be a pivotal year for the industry. Stay tuned — things are just getting interesting.