ZEROSUM "STATE OF THE DEALER" -- HIGH NEW VEHICLE PRICES PUSH CAR SHOPPERS TO USED VEHICLES, TARIFFS COULD PUSH THEM EVEN MORE

Used Vehicle Prices Fell to $25,400 in February, Marketed Price for New Vehicles was $48,800

GRAND RAPIDS, Mich., March 6, 2025 /PRNewswire/ -- If the United States enacts tariffs on vehicles and automotive parts from Canada and Mexico, new vehicle prices will likely rise to record levels, pushing more car shoppers into lower priced used vehicles, according to ZeroSum's February 2025 "State of the Dealer" report.  

New vehicle sales are already showing signs of slowing down, according to ZeroSum. Average new vehicle prices, while down slightly in 2025, are still $48,800. Meanwhile, used vehicle prices fell for the second consecutive month to $25,400. Adding tariffs to the mix will only widen this chasm.

Even before tariffs were enacted against Mexico and Canada, there were several signs the new vehicle market is facing a challenging near future. New vehicle movement fell for the second straight month in February to 980,000 units, down from 1.06 million in January. Automotive retailers are also putting more discounts and incentives on new vehicles. In February, average new vehicle incentives topped $2,000, the highest level in the past 12 months. In addition, Days-to-Move was 79 in February 2025, up from 63 the year prior.

"The new vehicle market is already showing signs of fatigue," said Josh Stoll, Senior Director of Dealer Success for ZeroSum. "A Vehicle Movement decline in February, coupled with ongoing velocity challenges and declining pricing power are indicators that dealers must contend with an environment that is becoming more competitive. There is additional uncertainty in the market related to the impact that Canadian and Mexican tariffs could have on consumer prices and retail profitability."

Used vehicle turn rates jumped 8 percentage points from 61% in January 2025 to 69% in February 2025. ZeroSum projects this momentum will continue, with used vehicle movement reaching 1.26 million in March, up from 1.19 million in February.

"With the new vehicle market softening, used vehicles are highly likely to pick up the slack for automotive retailers in the short-term, and perhaps longer if the tariffs remain in place," Stoll said. "The key for dealers will be to focus on used vehicle inventory to ensure potential customers have ample supply from which to choose."

ZeroSum is an automotive retail agency that provides cutting-edge inventory-based digital marketing solutions tailored to dealers. The State of the Dealer report is the first and premier data source for the new, used, and certified pre-owned automotive market.

Click here to download ZeroSum's entire State of the Dealer Report, including vehicle movement, turn rate, days-to-move, inventory, and pricing trends for new, used, and certified vehicles. 

About ZeroSum

ZeroSum is an industry leader in software, marketing, and data. Powered by its SaaS platform, MarketAI, ZeroSum is simplifying and modernizing automotive marketing by leveraging artificial intelligence, data, and scaling ability to acquire new customers. ZeroSum is the first and only company that matches consumer demand with automotive data in real-time for dealer marketing efficiency. For more information, visit www.zerosum.ai

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SOURCE ZeroSum