New vehicle sales in the US rose 2.7% last year as prices and interest rates fell slightly
DETROIT (AP) — New vehicle sales in the U.S. rose 2.7% last year as prices and interest rates eased a bit, making SUVs, cars and trucks a little more affordable.
Industry analysts say discounts such as rebates and low-interest financing should get even better as 2025 progresses, with the biggest deals coming from dealerships representing automakers that have struggled to sell in 2024.
Despite high selling prices that averaged more than $47,000, automakers sold just over 16 million vehicles in the U.S. last year, Motorintelligence.com said Friday. It was the best year for sales since 2019, before the outbreak of the coronavirus pandemic. But prices were still 27% higher than in 2019.
Electric vehicle sales rose 8.8% over the year to just under 1.3 million, beating the 2023 record of 1.19 million. That’s slower growth than the 47% increase in 2023, and electric vehicles face an uncertain future with the possibility that President-elect Donald Trump will end the $7,500 tax credit when he takes office later this month.
Gas-electric hybrids continue to grow in popularity with just over 1.6 million sold, a 36% increase over 2023.
General Motors ended the year with the U.S. sales crown, posting a 4.3% increase for the year, its best result since 2019. Toyota reported a 3.7% jump in sales, while Ford sales rose 4 .2%.
Jeep and Ram maker Stellantis, which struggled for most of the year with too many expensive vehicles on the sales floor, posted a 14.8% drop in sales. It was pushed from fourth place to fifth by Honda, which recorded a growth of 8.8%.
Nissan sales rose 2.8% for the year, barely beating out Hyundai with sales up 4.8%. Kia sales increased by 1.8 percent.
During the year, the average selling price of a vehicle fell slightly below 1%. Ivan Drury, director of insights at the automotive site Edmunds.com, said he expects that to continue at least into the second half of the year.
In addition, the Federal Reserve expects two more interest rate cuts this year on top of three in 2024. That should help keep monthly payments down a bit more, Drury said. The average auto loan rate fell from last year’s peak of 7.3% in July to 6.6% in December, Drury said.
He said he doesn’t think prices will change much in the first three months of the year as automakers try to release their 2024 model lines. “If you have six months or more, then just wait,” he said. “There’s potential for better things out there.”
To get a great deal, buyers may have to switch brands to Stellantis or perhaps Ford, which have more inventory at their dealerships than Honda and Toyota, Drury said.
