David Greene, Analyst at Cars.com, stated: “Affordability is improving, but we’re not out of the woods.”
Two interest rate cuts in late 2024 provided some relief, but the average new-car price remains stubbornly high at US$49,000. Although the figure is slightly below the US$50,300 peak in mid-2023, it’s still a steep climb from the US$37,000 average in early 2021.
Compounding the issue, high loan delinquencies and falling used-vehicle values have made it harder for consumers to trade or sell vehicles.
“While inflation is cooling, sticker shock and affordability in the auto market remain key challenges for 2025,” David noted.
A bright spot for budget-conscious buyers
There is hope for budget-conscious shoppers, as new-car inventory priced under US$30,000 rose by 42% year over year in November 2024. Cars.com’s newly enhanced platform aims to simplify the process for shoppers, enabling easy comparisons of vehicles and financing options.
“In 2025, more car shoppers may turn to new cars as the better option,” David added. Prices have inflated with limited, late-model used cars available due to reduced sales and leases in recent years. The shift may benefit new-car buyers who could get higher trade-in values to offset their purchases.
