Stabilized Used Vehicle Prices Forecasted for 2025 Amid Post-Pandemic Adjustments

Used vehicle prices are predicted to stabilize further in 2025, offering potential buyers a more predictable market. However, prices remain elevated compared to pre-pandemic levels.

Used vehicle pricing is expected to stabilize in 2025, continuing a trend observed in 2024 after years of pandemic-driven volatility. According to Cox Automotive, a leading auto data and logistics firm, wholesale prices tracked by the Manheim Used Vehicle Value Index will likely close the year 1.4% higher than December 2024.

While monthly fluctuations in prices are anticipated due to seasonal trends and market dynamics, they are not expected to mirror the drastic swings seen during the pandemic years. By comparison, 2024 saw a modest 0.4% increase in the index following significant declines of 7% in 2023 and nearly 15% in 2022. These drops followed unprecedented price surges of 46.6% in 2021 and 14.2% in 2020, driven by historic disruptions in the availability of new vehicles caused by supply chain challenges.

The spike in used vehicle prices was a notable contributor to inflation during this period, as acknowledged by the Biden administration. However, the current trend of price stability marks a welcome change for consumers. Retail pricing typically lags behind wholesale price changes, but the rate of decline in retail prices has been slower than the drop in wholesale rates.

Cox Automotive senior director of economic and industry insights, Jeremy Robb, stated, “We are ending some of the moves from the pandemic. We’re bound to see some volatility in our forecast.” Historically, the average year-end increase in the Manheim Index has been 2.3% (excluding the outlier years of 2021 and 2022), with an average month-to-month movement of just 0.2%.

As of December, the average listing price for a used vehicle stood at $25,565, a slight increase from $25,493 the previous month but a 3% decrease compared to the prior year. Looking ahead, used vehicle sales are projected to grow by 1% year-over-year, reaching 37.8 million units in 2025. Retail sales within this category are expected to hit 20.1 million, reflecting a 1.2% increase.