The automotive industry is constantly evolving, as are consumer trends. For car dealerships, keeping up with the competition means staying on top of customers' demands. Current car buying trends can be a good indication of where the market is headed. Here, we highlight some key trends ahead for 2025, based on the activity seen in the year's first quarter.
Trends in Customer Demands for Vehicles in 2025
While it's impossible to perfectly predict what will happen in Q2, Q3, and Q4, Q1 activity and news offer some indication of where the market is headed. Here are some upcoming consumer trends in the automotive industry.
1. Tariffs Mean Ups and Downs for Buyers and Car Dealerships Alike
The government's announcement of auto tariffs in Q1 had some consumers worried about price hikes. Since the current administration announced auto-specific tariffs on March 26, car dealerships have seen a surge of buyers in the second quarter. Consumers are eager to snap up tariff-free inventory, leading to the most significant increase in new car sales in the past four years1. For those with a lot of inventory priced before the new tariffs, this may be an opportunity to boost turnover. Now is a good time to revisit the inventory you already have on the lot and give it a boost in your marketing.
On the other side of the coin, the increased car prices expected to accompany tariffs may throw the automotive industry in disarray down the line. Proposed tariffs on goods from Canada and Mexico could disrupt the automotive supply chain, impacting cash flow and profitability.
2. Electric Vehicles Remain a Promising Prospect
The first quarter of the year saw the new administration announce plans to revoke the previous administration's electrical vehicle (EV) mandate. That old mandate had a big goal: 50% of new vehicles sold in the US were to be battery-powered by 20302. However, lifting this mandate alone doesn't mean that EVs are history in the American car-buying market.
It's estimated that by 2030, EVs will represent more than 60% of vehicles sold globally3. Widespread adoption will depend partly on infrastructure changes, like ensuring sufficient charging stations are available. Car dealerships may have to consider regional EV support and demands when deciding how much attention to give this niche in 2025.
3. The Used Versus New Car Markets Are Evolving in Different Ways
The first months of the year were less promising for the new car market. In February, for example, new-car searches were down 7.2% year over year. A simultaneous bump in inventory meant consumers had more choices than in the past, while prices remained steady4.
The used car market saw prices trending downward in Q1. Supply remained stable, but competition was especially fierce for low-mileage vehicles, which were in lesser supply4. Given these trends, automotive dealerships would do well to promote any low-mileage used cars they have on the lot as the year continues.
4. Cutting-Edge Tech Is Gaining Ground
Consumers are already using artificial intelligence (AI) to inform their financing decisions and help them when shopping around and selecting vehicles. The takeaway for car dealerships is that it's more critical than ever to offer personalized services (like one-on-one interactions and targeted recommendations) tailored to consumer needs and wants. Customization with a human touch is one thing AI can't offer.
Modern technology is in demand in other areas of car buying as well. Expect a rise in software-defined vehicles (SDVs). These automobiles have novel features and functions defined by software, enabling upgrades and new features over a single vehicle's life cycle. It's similar to how a phone update allows for new features without having to buy a new phone5.
5. Consumers Want to Feel Empowered
Consumers no longer rely on a single car dealership salesperson for information about automotive buying. Vehicle shoppers are increasingly turning to online media for car-buying research and enjoy the convenience of browsing virtually. Car dealerships must meet this demand for an omnichannel presence if they're going to keep up with consumer demand.
Stay Ahead of Consumer Buying Trends with ACV Max
ACV MAX can help you stay informed about car buying trends by providing market data on vehicle data in real-time dashboards. With this information, you can keep up with the evolving marketplace and adjust your pricing and inventory strategies more quickly to meet market needs and the fast-changing market conditions. Some of the top dealerships use ACV MAX to help them make better, more profitable decisions about their dealership. Sign up today for a demo.
Sources
1. Domonoske, C. (10 April 2025). Tariff chaos sends some drivers racing to buy, while others pump the brakes. NPR. Retrieved April 11, 2025, from https://www.npr.org/2025/04/10/nx-s1-5356463/car-sales-tariffs-chaos
2. Domonoske, C. (30 January 2025). Trump's Pulling A U-Turn On EVs, But Not Much Has Changed — Yet. NPR. Retrieved March 31, 2025, from https://www.npr.org/2025/01/30/nx-s1-5272749/donald-trump-ev-electric-vehicles-subsidies-auto-industry
3. (September 2022). By 2030 EVs Represent More Than 60% Of Vehicles Sold Globally, And Require An Adequate Surge In Chargers Installed In Buildings. IAE. Retrieved March 31, 2025, from https://www.iea.org/reports/by-2030-evs-represent-more-than-60-of-vehicles-sold-globally-and-require-an-adequate-surge-in-chargers-installed-in-buildings
4. Greene, D. (February 2025). More EVs and a Buyer-Friendly New Car Market — But Tariff Jitters Loom. Cars Commerce. Retrieved March 31, 2025, from https://www.carscommerce.inc/more-evs-and-a-buyer-friendly-new-car-market/
5. Next in Auto 2025. PwC. Retrieved March 31, 2025, from https://www.pwc.com/us/en/industries/industrial-products/library/automotive-industry-trends.html
