According to the latest data from J.D. Power and GlobalData, new-vehicle sales–including both retail and non-retail– for January 2025 are projected to rise to 1,105,900 units, reflecting a 4.4% year-over-year increase. Retail sales specifically are expected to hit roughly 904,200 units, marking a 4.8% increase compared to January 2024.
The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is anticipated to land around 15.6 million units, an increase of 0.6 million units from the same time last year.
As for the average retail transaction price (ATP) for new vehicles, it’s estimated at $44,636, which is slightly down by $238, or 0.5%, from January 2024. Despite the minor dip in transaction prices, consumers are on track to spend nearly $38.5 billion in total retail purchases for new vehicles this month, a 5.3% increase from last year and the highest amount recorded for January.
While inventory levels continue to rise, retail inventory is projected to reach 2.2 million units, up 31.1% from January 2024. This increase in stock has led to higher manufacturer and retailer discounts as they aim to clear excess inventory. As a result, total retailer profit per unit is forecast to decline by 13.5% compared to last year. This decrease is largely driven by fewer vehicles being sold above the manufacturer’s suggested retail price (MSRP) and the ongoing effect of rising inventory levels and deeper discounts.
Incentive spending is another area where shifts are noticeable. The average incentive spend per vehicle is expected to rise by 29.3%, reaching $3,226. Leasing, in particular, is contributing to this increase, with lease offers expected to account for 24.3% of retail sales in January. However, a significant decrease in expiring leases (down 36.7% from the prior year) suggests that consumers are opting for different financing options.
One key trend in the industry that continues to play a crucial role is the performance of electric vehicles (EVs). According to Elizabeth Krear, vice president of the electric vehicle practice at J.D. Power, EV sales saw a strong push in December, with retail share for the year’s final month reaching 10.5%. However, overall EV sales only grew by 0.7 percentage points year-over-year in 2024. As of January 2025, the market for battery electric vehicles (BEVs) remains robust, with strong demand and a notable federal tax incentive landscape that has driven purchases. The average transaction price for BEVs was slightly lower than that of non-EVs in December, with the $45,700 price tag for BEVs coming in about $800 lower than the combined average for hybrid and gas-powered vehicles.
On the global front, the automotive industry is showing promising signs for the year ahead. According to Jeff Schuster, vice president of research at GlobalData, the global light-vehicle selling rate reached 96.0 million units in December 2024, marking the highest level since August of that year. Sales were up 6% year-over-year, bolstered by strong demand from regions such as China and India. Global vehicle sales for the year totaled 88.6 million units, a 2% increase from 2023, and a solid outlook for 2025 is projected with global sales expected to reach 91.7 million units, up nearly 4% from 2024. However, challenges such as the threat of tariffs remain a risk that could impact U.S. sales, particularly if new tariffs on imports are imposed, potentially raising vehicle prices and disrupting global momentum.
Meanwhile, the used-vehicle market continues to fluctuate. The average price for a used vehicle is down by 1.2% compared to January 2024, now sitting at $27,794. As a result, trade-in equity is also lower, now averaging $7,636—down $538 from a year ago. Despite the decline in prices, used vehicles remain an important segment of the market, and high demand is expected to persist.
Overall, despite some challenges, the automotive market remains strong. The combination of rising sales, deeper discounts, and higher inventory levels reflects the current health of the industry. With increasing consumer spending and positive global market trends, the outlook for both new and used vehicles looks promising for the year ahead.
