Welcome to what has already been an exciting start to 2025! Twists and turns are already happening, and It’s that time of year again to take a closer look at the automotive trends and hot topics that should be on every dealer’s or OEM’s radar in order to know what you should be focused on to pave the way for a smoother road ahead this year.
With so much to digest from the astounding innovations we witnessed in the snow and frigid cold in New Orleans at The NADA Show 2025, we’ve distilled what I consider the five hot topics in automotive for 2025. From post-election impacts, to tariffs, to the ongoing EV and omnichannel buying journey for both consumers and dealers, these trends are set to shape the future of the automotive industry.
Below find not only those trends and hot topics, but a few actions we’ve outlined for dealers to take to stay a step ahead, no matter what the year ahead holds. And if it’s anything like the weather at NADA 2025… you’ll be ready to weather any storm!
1. Post-Election Impact on the Automotive Industry
The first hot topic on my list is something that has been on everyone’s mind… the post-election impact on the automotive industry. This is set to significantly influence the automotive industry. With the election chaos behind us, both consumers and dealers are ready to move forward with renewed confidence and strategic planning.
The new administration is expected to bring about several policy changes that will shape the future of the industry. Here’s what you can expect:
Policy Changes
The new administration is anticipated to introduce critical policy changes affecting cars, emissions, tariffs, and electric vehicles (EVs). These changes will likely include:
- Cars and Emissions: New regulations aimed at reducing emissions and promoting cleaner vehicles.
- Tariffs: Adjustments to tariffs that could impact the cost of imported vehicles and parts.
- EVs: Policies to support the growth of the EV market, including incentives for consumers and manufacturers.
Consumer Sentiment
Consumer sentiment is expected to be positive in 2025, as it often tracks higher in the year following an election. This optimism is driven by the anticipated economic stability and favorable policies that will put more money in consumers’ pockets. The University of Michigan data supports this trend, indicating a likely increase in consumer confidence
Action Steps for Dealers
To capitalize on the post-election environment, dealers should take the following action steps:
- Get Off “Pause”: It’s time to move forward with strategic planning and make decisions that have been on hold due to election uncertainties.
- Understand Supply and Demand: Understanding the supply and demand equation in your market areas will help you optimize inventory and pricing strategies.
- Measure Everything: To optimize performance and profitability dealers need to prioritize tracking consumer interactions, sales processes, and market trends.
2. Vehicle Affordability
The second hot topic has been a “hot” for both dealers and consumers alike over the past few years, so it should come as no surprise that vehicle affordability continues to be a significant concern in 2025. The ongoing challenges include rising insurance costs and the impact of natural disasters on the market.
However, it’s not all doom and gloom. There are also improvements on the horizon, such as lower rates and more loan options, which are expected to make vehicles more affordable for consumers.
Loan Options
One of the key factors contributing to improved vehicle affordability is the availability of lower rates and more loan options. As credit availability expands, consumers will find it easier to finance their vehicle purchases. This trend has been improving since the summer, and it is expected to continue into 2025.
Pricing Pressure
Pricing pressure remains a critical issue for the automotive industry. With vehicle inventory expected to grow further in 2025, or at least not retreat, dealers must use data to price vehicles correctly. This involves understanding market trends, inventory levels, and consumer demand to set competitive prices that move inventory quickly and build trust with consumers.
Action Steps for Dealers
To navigate the challenges and leverage the improvements in vehicle affordability, dealers should take the following recommended action steps:
- Train Teams to Speak to Rate Changes and Incentives: Ensure that your sales teams are well-versed in the latest rate changes and available incentives. This knowledge will help them effectively communicate the benefits to consumers and close more deals.
- Master Talk Tracks and Processes on Trade-In Valuations: Develop and refine talk tracks and processes for trade-in valuations. Accurate and transparent trade-in valuations can build trust with consumers and facilitate smoother transactions.
- Provide Insurance and Peace of Mind Products: Offer insurance and peace of mind products to every customer. These products can help mitigate the rising costs of vehicle ownership and provide added value to consumers.
- Focus on the Importance of Fixed Operations: Emphasize the importance of fixed operations within your dealership. Fixed operations, such as service and maintenance, provide a stable revenue stream and can enhance customer satisfaction and loyalty.
3. Market Forecast for New, Used, and Wholesale Vehicles
My third hot topic making the list is the market forecast for new, used, and wholesale vehicles—and the outlook for 2025 is refreshingly promising. Yes, you read that right!
The automotive industry is expected to see a return to more traditional market conditions, with favorable predictions for both new and used vehicle sales. Dealers should stay closely aligned with market trends and predictions to capitalize on the opportunities that lie ahead. Even in traditional conditions, some might even label “mild” compared to previous years, there are chances to capture incremental revenue and market share.
Here’s a look at each market:
New Vehicles
The new vehicle market is predicted to have its best year since 2019. With inventory levels normalizing and traditional incentives returning, consumers are expected to respond positively. The new vehicle market is projected to exceed 16 million units for the first time since 2019, signaling a strong recovery and growth.
Used Vehicles
The outlook for used vehicles is equally positive, with 2025 expected to be the best year since 2021. The used vehicle market has stabilized since the pandemic, and consumer satisfaction remains high. Dealers should focus on optimizing their used vehicle processes to take advantage of this favorable market environment.
Wholesale Market
The wholesale market is expected to experience tight inventory and shrinking off-lease supply, putting pressure on the Certified Pre-Owned (CPO) market. Dealers will need to dial in their acquisition, pricing, and marketing strategies to navigate these challenges effectively. Despite these pressures, the wholesale market is predicted to remain strong, providing opportunities for dealers who can adapt to the changing conditions.
Action Steps for Dealers
To capitalize on the market forecast for 2025, the advice to dealers is to consider the following action –steps.
- Drive Market Share: dealers should create specific processes for new, used, and CPO vehicles to drive market share. Tailoring strategies for each segment will help dealers optimize their operations and capture more sales.
- Recognize the Importance of Distance Retailing, Digital Retailing, and eCommerce: Embrace distance retailing, digital retailing, and eCommerce to meet consumer demands and stay competitive. These channels are essential for reaching a broader audience and providing a seamless buying experience.
4. The EV Journey Continues
The journey of EVs has been filled with ups and downs over the past few years, and it shows no signs of slowing down in 2025. The fourth hot topic is for dealers and OEMs to stay informed and adaptable about EVs to navigate the evolving landscape.
With more models, hybrids, and legislative changes on the horizon, this market is poised for significant growth and transformation. Let’s look at the three factors pushing the EV journey forward:
More Models and Hybrids
The increase in models and hybrid options provides consumers with a wider range of choices, catering to different needs and preferences. Dealers should be prepared to educate consumers on the benefits and features of these new models to drive adoption.
Global Insights
Insights from China’s EV market and government policies offer valuable lessons for the US market. In China, the government has pushed for EV adoption through incentives such as immediate and cost-free license plates for EVs, compared to the lengthy and expensive process for internal combustion engine (ICE) vehicles. This has led to significant EV penetration in the market. US dealers and manufacturers should consider how similar policies and incentives could drive EV adoption domestically.
Legislative Changes
Legislative changes are expected to continue supporting the growth of the EV market. This includes potential tax incentives and regulations aimed at promoting cleaner vehicles, however there might be some roll backs or pushes forward.
Dealers should stay informed about these changes and leverage them to encourage consumers to make the switch to EVs.
Action Steps for Dealers
To successfully navigate the ongoing EV journey, it’s highly recommended dealers take the following action steps:
- Be a Champion for EV Adoption: Embrace the role of an EV advocate within your dealership and promote their benefits. Be a cheerleader, truly learn your vehicles, the charging options and the advantages.
- Know Your Customer: Understand that EV adoption is not a one-size-fits-all solution. Different consumers have different needs and readiness levels for EVs, so tailor your approach to meet each customer’s unique requirements.
- Educate Your Sales Consultants: Ensure that your sales consultants are well-versed in the features, benefits, and incentives related to EVs. This knowledge will help them effectively communicate with consumers and address any concerns or questions.
5. Consumer Satisfaction and the Omnichannel Experience
The fifth hot topic trend for dealers and OEMs is consumer satisfaction and the omnichannel experience. This should come as no surprise as dealers have been hearing A LOT about the importance of creating an omnichannel experience, which allows consumers to interact with dealerships through multiple channels, both online and in-store.
This seamless integration of digital and physical touchpoints has transformed the car-buying process, making it more convenient and personalized for consumers. Here are a few reasons why:
Online Processes
The ability to complete more of the car-buying process online is paramount to the consumer experience. Your buyers appreciate the convenience of researching, comparing, and even purchasing vehicles from the comfort of their homes. This shift towards digital retailing has empowered consumers, giving them more control over the buying process and enhancing their overall experience.
Inventory and Control
Having more inventory available and giving consumers control over their buying journey has also contributed to higher satisfaction levels. When consumers can see a wide range of options and customize their purchase process, they feel more confident and satisfied with their decisions. This sense of control and transparency builds trust and loyalty between consumers and dealerships.
Personalized Experience
A personalized experience is crucial for consumer satisfaction. When consumers feel that their unique needs and preferences are understood and catered to, they are more likely to have a positive experience. Personalization can be achieved through tailored communication, customized offers, and attentive customer service. By providing a personalized experience, dealerships can differentiate themselves and build lasting relationships with their customers.
Action Steps for Dealers
To further enhance consumer satisfaction and leverage the omnichannel experience, dealers should take the following action steps:
- Be Your Brand: Ensure that your brand values and identity are consistently reflected in every consumer interaction. This helps build a strong and recognizable brand that consumers can trust.
- Emphasize the Importance of Every Consumer Contact: Every interaction with a consumer is an opportunity to build a positive relationship. Train your team to prioritize customer service and make every contact count.
- Find the Deal in Every Deal: Don’t let a potential sale slip away. Encourage your team to identify and address any obstacles that may prevent a deal from closing. Track missed opportunities and learn from them to improve future performance.
- Ask for the Business and Earn Referrals: Actively seek out new business and ask satisfied customers for referrals. Word-of-mouth recommendations are powerful and can significantly boost your dealership’s reputation and sales.
- Remember Lifetime Customer Value: Focus on building long-term relationships with your customers. Providing excellent service and maintaining ongoing communication can turn one-time buyers into loyal, repeat customers.
For the Road Ahead
Consider this only the beginning. New technologies that benefit your dealership and your customers are always right around the corner. In fact, keeping up with new technologies is an integral part of running a successful dealership. It’s also the best way to keep from falling behind. This year, staying ahead of the curve is more important than ever, especially when we’re in for some twists and turns this year.
From post-election impacts to the ongoing EV journey, to understanding consumer wants and needs, by understanding and addressing these five hot topics and trends, you can navigate the road ahead more smoothly and successfully.
To help you with this, don’t forget that with every Autotrader listings package, you’ll gain access to nVision, an invaluable tool for dealers and their professionals. nVision provides the key reporting data, shopper behavior data, and more to ensure you have the insights and the step-by-step to make smarter and more knowledgeable market spend decisions that will truly move the needle in your business.
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