A heightened focus on affordability—driven by rising ownership costs, tariff concerns, and a late-model used supply crunch—defined the market in 2025, setting the stage for 2026 BOSTON, Dec. 11, 2025 (GLOBE NEWSWIRE) -- CarGurus, the No. 1 most visited automotive shopping site in the U.S.1, today released its 2025 Recap and 2026 Outlook, highlighting the year’s top influences on the automotive market and expectations heading into the new year. “If 2024 was defined by declining affordability, 2025 was the ye ...

Core Insights - The automotive industry experienced a strong start in 2025, with new-vehicle sales increasing by 4.8% year over year in the first quarter, and March sales marked the sixth-highest in nearly 50 years, driven by pre-tariff buying, seasonal tax refunds, and automaker incentives [3][5]. Market Dynamics - Affordability concerns are rising as vehicles priced under $30,000 now represent only 14% of new-vehicle inventory, a significant drop from 38% during the 2019-21 period, indicating a reduced availability of budget-friendly models [3][4]. - The majority of sub-$30K vehicles (nearly 90%) are assembled outside the U.S., making them vulnerable to price hikes or production cuts due to shifting trade policies [4]. Inventory and Pricing - Inventory levels have improved, with new-car supply up 9% year over year, and vehicles are spending an average of 78 days on dealer lots, aligning with pre-pandemic norms [6]. - The average new-car price has remained around $49,000 for the past 18 months, which is still 30% higher than in Q1 2019, and the introduction of tariffs is expected to push prices higher [6]. Financing Conditions - Despite a 100 basis point cut in interest rates by the Federal Reserve between September and December 2024, auto-loan APRs increased by 19 basis points year over year in Q1, as lenders tightened credit terms amid market uncertainty, adding to affordability challenges for buyers [7][8].