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The automotive industry in the United States has shown resilience in March 2025, with new vehicle retail sales reaching an expected 1,268,200 units, a year-on-year growth of 9.6%. This growth is accompanied by a 13% increase from March 2024, according to industry analysis.
The total new-vehicle sales for March 2025, including retail and non-retail transactions, are projected to reach 1,525,200 units. J.D. Power's analysis indicates that tariffs have led to higher vehicle prices, with automakers passing most of the tariff costs onto consumers, causing price increases averaging around $1,760 per vehicle. Despite these higher prices, new vehicle retail sales showed resilience through March 2025, supported by strong consumer demand.
Toyota and Lexus dominated the sales market in March, with models like the Sienna and Highlander performing strongly, suggesting brand loyalty and competitive pricing helped sustain sales despite tariff-induced price pressure. Elevated interest rates for auto loans impacted affordability but did not significantly reduce sales momentum during this period.
The seasonally-adjusted annualised rate (SAAR) for total new-vehicle sales in March 2025 is expected to be 16.8 million units. The average retail transaction price for new vehicles in March 2025 is trending toward $44,849, up $637 from March 2024.
The average monthly finance payments are on track to reach $731 this month, an increase of $12 from March 2024 and the highest on record for the month. New-vehicle-loan interest rates are expected to remain flat year on year at 6.82%.
Despite the challenges posed by tariffs, J.D. Power forecasts continued growth for the overall new vehicle market beyond March 2025, with positive sales projections for mid-2025 months. Total new-vehicle sales in the first quarter of 2025 are projected to reach 3,860,000 units.
Fleet sales are projected to decline by 4.7% from a year ago. Average trade-in equity is expected to rise slightly, up $242 year on year to $7,641. The average incentive spend per vehicle in March 2025 is expected to grow by $235 (€218), or 8.3%, from March 2024.
Interestingly, the used market is being influenced by emerging tariff-related price concerns. The average used-vehicle price is trending towards $28,552, down just $22 from the same time last year.
In summary, while tariffs imposed additional costs and pushed up new vehicle prices in the U.S. market, strong consumer demand, brand strength, and some tariff relief measures allowed new vehicle sales in March 2025 to remain robust. J.D. Power's analysis and broader market data suggest that the industry is performing as expected, with gradual increases in sales pace at the expense of gradually larger discounts and reduced profitability.
The growth in new vehicle retail sales in March 2025, accompanied by a rise in total new-vehicle sales, can be attributed to the resilience shown by the automotive industry, despite tariffs leading to increased vehicle prices in the finance sector. The strong demand for vehicles, particularly from Toyota and Lexus, despite elevated auto loan interest rates, indicates that the transportation industry is adapting to these financial challenges.
