There’s good news on the horizon for one of radio’s biggest advertisers: New vehicle sales in 2025 will reach 16.3 million in 2025, a 3% rise from last year.
That’s according to a new forecast from Cox Automotive, which also says electrified vehicle sales will continue to grow, accounting for one in every four vehicles sold this year. Cox also sees improving affordability, with expanding credit availability and falling auto loan rates.
Cox says the U.S. market ended last year with momentum and remains on a positive trajectory. Cox’s Kelley Blue Book estimates that 2024 new-vehicle sales came in at nearly 16 million — up more than 2% from 2023 and the best year from a volume standpoint since the pandemic.
“Cox Automotive is optimistic about 2025, with plenty of reasons to believe it will be the best year since 2019,” said Cox Automotive Chief Economist Jonathan Smoke. “The market is gaining momentum, economic fundamentals are improving, and consumer sentiment is pointing in the right direction. We are ready for what 2025 might bring.”
Cox says vehicle affordability remains a challenge, but the overall picture should become brighter this year. Auto loan rates have eased, and approval rates are rising, enabling growing demand. New-vehicle inventory volumes should continue to rise, Cox says.
The rising tides should also bolster the retail used market, with used retail sales expected to reach 20.1 million — the strongest performance for used autos since 2021. Inventory should remain tight, however: the Manheim Used Vehicle Value Index is forecast to rise at a historically normal pace, ending 2025 slightly higher on a year-over-year basis.
Cox also sees 2025 as a breakout year for electrified vehicles, with EVs comprising 10% of the 2025 market total, up from about 7.5% the year before. Hybrids and plug-ins will make up about 15% of the market. Meanwhile, sales of pure internal combustion engine vehicles will fall to 75% of total volume. That’s the lowest level on record.
Another plus factor for the auto industry: Satisfaction with the new-vehicle buying process is at an all-time high. According to Cox’s 2024 Car Buyer Journey Study, three out of four buyers said they were “highly satisfied.” A key factor in strong customer satisfaction is the omnichannel car-buying approach, which has made buying a vehicle a more efficient process.
“With the launch of the 15th Anniversary edition of the Car Buyer Journey, we are reminded again just how important it is to have an efficient vehicle buying process,” said Isabelle Helms, Vice president of Research and Market Intelligence. “Auto dealers who embrace the latest technology and engage in a transparent, easy-to-navigate process have consistently delivered the highest levels of satisfaction. That was true 15 years ago and remains true as ever today.”
New-vehicle buyers reported a record 75% satisfaction rate with the overall shopping experience, with dealership satisfaction reaching a historic high of 81%.
Cox’s research suggests that improved digital tools and advances in AI have revolutionized the car-buying experience, giving consumers a more transparent view of pricing, financing details and inventory availability. Buyers completing key steps online, like applying for credit or pre-filling paperwork, saved an average of 42 minutes at the dealership. New-vehicle buyers saved more time (49 minutes), while used-vehicle buyers saved 40 minutes.
That’s not to say that customers don’t value time at dealerships — for test drives, interacting with sales teams, and vehicle pick-ups.
“It is a common misconception that most vehicle buyers today want a completely online car-buying process,” said Helms. “The findings in the latest CBJ Study indicate that buyer satisfaction is influenced not merely by the time involved, but rather by the efficiency of the transactional aspects of the buying journey.”
