2025 Market Durability Shifts to Cautious Optimism for 2026
- Average new-car price remains at just over $49K for third year in a row
- U.S.-built vehicles now account for 54% of all new-vehicle inventory
- Used-car body style at record low, down to less than 30% of all used inventory
- Automakers lean into fully loaded options: High trims are at the highest share in five years.
- Consumers ultimately bought more vehicles in 2025, but inventory sat on dealer lots three days longer on average.
At a glance, 2025 looked surprisingly steady for the auto industry. Sales in 2025 grew modestly to 16.2M units. Both inventory and new-car pricing remained relatively flat as automakers managed production and mostly absorbed tariff price increases.
Hindsight’s 20/2(5) — the Year of the Tariff
The data on tariffs is here at last.
Tariffs dominated headlines in 2025, yet their real impact was more nuanced. Over the year, average new-vehicle list prices rose just $302; however, that modest increase masks dramatic variation by production country.
U.S.-built vehicles — which grew to 54% of new-vehicle inventory — actually became more affordable, posting an average price decline of $308. Mexican-built vehicles, the second-largest source of supply, saw only a $95 increase. European imports, however, surged by more than $7,000 even as they accounted for less than 6% of available inventory.
The takeaway for consumers was clear: Where a vehicle was built mattered more than ever, and for automakers, 2025 catalyzed the necessity of reshaping supply chains.
Sedans Submit to SUV Supremacy
For decades, new-vehicle production has shown a slow but steady shift toward SUVs — and, subsequently, away from sedans. The trickle down to the used market is officially catching up, with sedans, coupes and convertibles accounting for less than 30% of used inventory, down from 41% in 2019. This is most apparent in the mainstream-brand sector, which had 44% less car inventory in 2025 versus 2019.
Used-car prices have increased 42% since 2019, eclipsing the 35% rise in new-car prices over the same period. Changing consumer preferences combined with shifting production have led to the decline of the used sedan, a traditional market entry point.
Used-Car Scarcity Meets the Affordability Crunch
In 2026, cost pressures — largely driven by inventory challenges — will continue to shape decisions for budget-conscious buyers and could be intensified by price inflation.
Limited used-vehicle supply has reshaped retail operations and shopper behavior. Dealers have already managed through years of vehicle shortages by employing creative sourcing strategies, turning vehicles faster, and buying higher-priced or higher-mileage inventory. Vehicles with over 100,000 miles are expected to constitute a larger share of available used inventory as affordable options remain limited.
If 2024 was about bracing for uncertainty in the auto industry and 2025 was about living in it, 2026 will be about recalibration — redefining expectations and processes to meet the affordability and availability constraints of the moment.
