Car market experts think new U.S car sales will increase in 2025, despite the possibility of policy changes that could affect the economy.
Jonathan Smoke, Chief Economist for Cox Automotive, said he expects continued strong consumer demand for new cars, even if immigration and fiscal policy changes from the incoming Trump administration risk reigniting inflation and driving up car loan rates.
Smoke said any changes won't happen quickly, and he thinks it's very unlikely President-elect Donald Trump will carry out his threat to impose tariffs on Mexico and Canada, where so many car parts come from.
"It would be a radical disruption," Smoke said. "So it literally blows the mind and would completely freeze up the market if indeed tariffs were to be implemented."
Trump has also said he wants to eliminate the federal tax credit for electric vehicles.
Smoke said that possibility, plus the fear that other changes could raise interest rates, will "create urgency," among consumers to get new cars before anything worsens the economy.
2024 new car sales reached 15.8 million units; 2025 is likely to be about 2.7% better, according to the Cox Automotive forecast, for a total sales year for new vehicles of 16.3 million.
