The used car market is shifting as the post-pandemic automotive landscape continues to evolve. After a 4.8% drop in 2024, used car prices are expected to fall another 3% in 2025. This ongoing decline is largely due to increasing discounts and incentives in the new car market, which are drawing buyers away from used vehicles.
During the pandemic, used car prices surged because of supply chain disruptions, chip shortages, and a slowdown in new car production. With fewer new vehicles available, demand shifted to used cars, driving prices up. Now, as production normalizes and new vehicle inventory rebounds, the market is correcting. Automakers are pushing new car sales through aggressive promotions—offering lower prices, better financing options, and attractive lease deals. These offers make new vehicles more accessible and appealing, especially to buyers who may have otherwise chosen used options. As a result, demand for used cars is dropping, forcing dealers to lower prices to remain competitive.
Adding to the downward pressure on prices is an increasing supply of used vehicles. Many cars leased or bought during the pandemic peak are now returning to the market. These late-model, well-maintained vehicles are attractive to budget-conscious shoppers but are contributing to a growing surplus, outpacing demand. Consumers, too, are changing how they shop. With more inventory and better deals available, buyers are taking their time, comparing options, and negotiating harder. Sellers, in turn, must offer more competitive pricing to close deals.
While falling prices may concern sellers, they’re a welcome change for many buyers. Those priced out of the market during the pandemic are now finding more affordable options. Lower prices also mean smaller loans, reduced interest, and broader access to car ownership. Looking ahead, the used car market is expected to keep adjusting as it finds a new balance. With steadier supply, more thoughtful pricing strategies, and increased buyer leverage, the market is becoming more consumer-friendly.
