4 Changes Coming for Car Buyers in 2025

From economic factors that favor the everyday car buyer to sustained electric vehicle growth and possible changes to their affordability, a lot can happen in the next year or so.

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If you’re in the market for a new or used car, or are looking to buy one next year, it’s worth knowing what kinds of changes might be coming. And while only time will truly tell, experts have their predictions.

Here are four possible changes coming for car buyers in 2025 .

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Fed Cuts Could Boost Purchasing Power

According to Mint , there are Fed cuts on the horizon. Current market pricing projects 155 basis points of cuts in 2024 and 2025.

To clarify, a basis point is a standard unit of measurement for interest rates and other finance-based percentages. These cuts could impact the average buyer’s purchasing power — in a good way.

“Given increased fears of a recession and pressure on the Fed to lower interest rates , purchasing power of the everyday car buyer is likely to rise in 2025,” said Michael Quigley, a co-founder at Impel .

“A 1.55% decrease in interest rates could decrease the cost of a $30,000 car loan by almost $1,000 annually.”

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There Could Be Changes to Electric Vehicles, Too

If you’re thinking about buying an electric car, there’s potentially good news on the horizon. According to Gartner , a technological research and consulting firm, EVs are predicted to continue gain popularity with an estimated 20.6 million new units shipped in 2025.

More supply could mean lower prices, but don’t celebrate just yet.

“We are moving from a ‘gold rush’ to ‘survival of the fittest,'” said Quigley. “The EV landscape could shift with the outcome of the 2024 US election as a Republican win could lead to the reduction/elimination of federal tax credits for EVs.”

Currently, most electric vehicles qualify for up to a $7,500 credit that buyers can use to reduce the cost of their purchase. Kelley Blue Book found that the average EV costs $56,371 without this credit. Comparable cars that don’t run on electricity cost $47,401 on average.

When you add that $7,500 credit, the cost of EVs more or less balances out. Still, prices could go down for EVs — even if the tax credit is cut.

According to Goldman Sachs, 2025 EV battery prices could drop by as much as 40% in 2025 compared to 2023. This could boost sales and potentially make these vehicles more affordable.

The Car Buying Process Will Likely Shift Toward Online Purchases

With sites like CarMax swiftly gaining popularity, more people are switching to the convenience of online shopping for new and used cars.

Citing a 2023 Cox Car Buying Report, Quigley said that 71% of people prefer purchasing a vehicle through a combination of online and in-person shopping.

“The same report saw that nearly 80% of buyers visited 3rd-party websites like Autotrader, Kelley Blue Book and Edmunds.com during their buying journey,” he added.

Autonomous Vehicles Will Continue To Gain Popularity

“We will see continued growth in autonomous driving technology as L3 and L4 autonomous driving systems are set to become more common by 2025 in Europe and North America,” said Quigley.

This information comes from a McKinsey report on the same topic. These systems are still relatively new to the market, so it might take some time before more car buyers switch over to autonomous vehicles.

Still, whether or not people choose to buy these types of cars, these changes could affect pricing — leading to higher short-term costs and lower long-term costs.

“The inclusion of these advanced systems could increase initial cost of vehicles but are likely to reduce long-term maintenance and insurance costs due to increased efficiency/safety,” Quigley continued.

Anyone who’s in the market for a car — whether it’s an electric vehicle or not — should be prepared for some changes coming next year and beyond. From possible tax credit cuts for EVs to a greater inclusion of autonomous vehicles to more shoppers seeking a mix of the online and in-person buying experience, one thing’s for sure: The industry is changing.

This article originally appeared on GOBankingRates.com : 4 Changes Coming for Car Buyers in 2025