- New vehicle sales surged by 4.8% in Q1 2025, despite affordability concerns.
- Vehicles priced below $30,000 represent only 14% of new inventory.
- Average new-car prices remain steady at $49,000, a 30% increase from Q1 2019 levels.
Cars Commerce (CARS, Financial) has published its Industry Insights Q1 2025 Report, highlighting significant shifts in the automotive market. New vehicle sales increased by 4.8% year over year, with March achieving the sixth-highest sales in 50 years. However, the affordability crisis deepens as the inventory of vehicles under $30,000 has dropped to 14%, compared to 38% from 2019-21.
Supply for new cars has risen by 9% year over year, with vehicles spending an average of 78 days on dealer lots, reflecting pre-pandemic norms. Despite steady prices, the average new-car price remains at $49,000, marking a 30% increase from Q1 2019. Potential tariff impositions threaten to further increase prices, affecting entry-level vehicles primarily.
Nearly 90% of vehicles priced under $30,000 are assembled outside the United States, exposing them to price hikes as trade policies evolve. Domestically manufactured models in this price range include the Honda Civic, Toyota Corolla, and Chevrolet Malibu, with the latter to be discontinued in 2026. The report also notes a 19 basis point rise in auto-loan APRs year over year, amid a backdrop of Federal Reserve rate cuts.
