As we look ahead to 2025, the used vehicle market appears poised for stability following several tumultuous years marked by significant price fluctuations. The automotive data and logistics company, Cox Automotive, forecasts that the wholesale prices for used vehicles, as tracked by their Manheim Used Vehicle Value Index, will show a 1.4% increase by the end of 2025 compared to December of the previous year. This prolonged period of price adjustments signifies a departure from the skyrocketing rates seen earlier in the pandemic, providing a glimmer of hope for consumers and potential buyers.
The Rollercoaster of the Last Few Years
The recent history of used vehicle pricing can only be described as erratic. After witnessing an extraordinary surge during the Covid-19 outbreak—where prices escalated by a staggering 46.6% in 2021 and 14.2% the following year—there were stark declines of 7% and nearly 15% in 2023 and 2022, respectively. These drastic swings can largely be attributed to the shortage of new vehicles caused by pervasive supply chain disruptions and parts shortages that plagued automobile manufacturing during the pandemic. It’s noteworthy that these spikes in used vehicle prices played a substantial role in the broader inflationary trends during this period, as highlighted by the Biden administration.
Although used vehicle prices are still elevated compared to their pre-pandemic levels, current trends suggest a move toward normalization. The retail pricing, typically reflective of wholesale fluctuations, has not dropped as swiftly; however, the expectation of a gradual stabilization indicates that the worst might be behind consumers. Jeremy Robb, a senior director at Cox Automotive, emphasized this transition, noting that “we are ending some of the moves from the pandemic.” Despite the signs of recovery, he acknowledged that we should also brace for sporadic volatility in future forecasts.
Market Predictions for 2025
Forecasts suggest that the average listing price for used vehicles will see slight increases, with December 2024 prices hovering around $25,565—up marginally from the previous month but down 3% year-over-year. The broader market anticipates a 1% increase in used vehicle sales, projected to hit approximately 37.8 million transactions in 2025. Of this volume, around 20.1 million transactions are expected to represent retail sales, reflecting a modest increase of 1.2%.
The expected stabilization of used vehicle prices in 2025 is encouraging news for car buyers. While prices remain elevated, the market’s direction suggests that consumers may experience a more balanced and predictable landscape. As the automotive industry continues to recover from the disruptions of the past few years, the hope is that both wholesale and retail prices will align more closely, ultimately providing buyers with greater purchasing power. The ongoing evolution of the market will be essential to watch, as various economic factors will inevitably contribute to whatever trends emerge in the coming years.