CarGurus Examines 2024 Auto Market Influences and Expectations for 2025 Following a Year Defined by Affordability

Core Insights - The defining theme for 2024 is affordability, with a significant increase in demand for used vehicles, particularly Certified Pre-Owned Vehicles, driven by high interest rates and persistent high prices [2] - The new vehicle inventory surged by nearly 31% since the end of 2023, with average prices around $49,000, while the used vehicle market saw a 3% decline in average price to $27,900 [2] - The report highlights the rise of hybrid vehicles, with average prices dropping nearly 10% to $46,600, making them more attractive compared to electric vehicles [3] Market Trends - The used vehicle market is experiencing a shortage of late model year listings due to the semiconductor shortage, with 2021 model inventory down by nearly 22% and 2020 models down by 17% [4] - Demand for larger body styles, especially pickups, remains strong, with models like Chevrolet Silverado 1500 and Ford F-150 being the most viewed in 2024 [5] Future Outlook - Potential impacts of tariffs are a concern, particularly for automakers like Hyundai, Mercedes-Benz, and Kia, which have a high percentage of models made outside North America [6] - The possible end of the New Clean Vehicle Tax Credit could limit EV sales demand in 2025, especially in the used market where one-third of listings are under the $25,000 qualification limit [7] - There is a rising demand for higher-priced models, which may be influenced by potential lower interest rates, expanding buying power for consumers [9]