2025 Vehicle Buying Guide
2025 Vehicle Buying Guide: New Year, Similar Story
In previous years, WikiFinance typically would recommend shopping used instead of new, but that equation has changed in 2025. New vehicle sales are projected to reach 16.3 million units, a 2.8% increase from 2024, driven by improving affordability, expanded credit availability, and growing manufacturer incentives. Electrified vehicles are becoming mainstream, with one in four new cars sold expected to be hybrids or EVs. Meanwhile, the used car market remains tight due to lingering supply shortages from reduced new car production during the pandemic years. Used vehicle prices are stabilizing but remain elevated compared to historical norms, with retail sales projected to hit 20.1 million units—the strongest performance since 2021. Overall, 2025 is shaping up to be the most balanced year for buyers and dealers since before the pandemic, offering opportunities for those navigating both new and used markets.
2025 Negotiation Approach: Focus Remains on "Out-the-Door" Price
Buying a vehicle at a dealership in 2025 is challenging due to the prevalence of hidden fees that inflate the final price. Dealerships often advertise attractive sticker prices, but the final cost can quickly escalate with the addition of charges like documentation fees, destination fees, dealer add-ons (such as paint protection or nitrogen-filled tires), and other miscellaneous expenses. These hidden fees can be difficult to identify upfront and are often only disclosed during the final stages of negotiation, making it hard for buyers to accurately assess the true cost of the vehicle. This lack of transparency can lead to frustration and financial strain, as buyers may end up paying significantly more than they initially anticipated, eroding their budget and potentially trapping them in an unfavorable loan agreement. Therefore, it’s crucial for buyers to be vigilant, ask for a detailed breakdown of all charges, and focus on negotiating the “out-the-door” price to avoid these hidden pitfalls.
When negotiating at a dealership in 2025, starting with the out-the-door (OTD) price is essential because it provides the true cost of the vehicle, including all taxes, fees, and additional charges. Unlike the advertised sticker price, which often excludes expenses like sales tax, documentation fees, registration, and dealer add-ons, the OTD price represents the total amount you’ll actually pay to drive the car off the lot. By focusing on this number upfront, you avoid surprises during final negotiations and ensure a transparent comparison between dealerships. It also helps prevent dealers from shifting costs into hidden fees or upselling unnecessary extras. Starting with the OTD price puts you in control of the negotiation process, allowing you to make an informed decision based on your budget and avoid overpaying.
Don’t hesitate to walk away from a deal if the dealership isn’t meeting your expectations; remember, you’re in control of the purchase. Before leaving, make sure to ask for their absolute best out-the-door (OTD) price in writing. Clearly communicate that if they can’t meet the OTD price you’re targeting, you intend to shop that offer around to other dealerships to see if they can beat it. This creates a sense of urgency and transparency, showing them you’re a serious buyer willing to explore all your options. Walking away demonstrates that you value your money and are not afraid to seek a better deal elsewhere, which can often prompt the dealership to reconsider their offer and become more flexible.
Navigating the Buying Process in 2025: New vs. Used
In 2025, deciding between a new or used car involves weighing several pros and cons. New cars offer the latest technology, advanced safety features, and full manufacturer warranties, providing peace of mind and lower initial maintenance costs. Automakers are also offering competitive incentives like 0% APR financing and cash-back deals, making new cars more appealing despite their higher upfront cost. However, new vehicles experience rapid depreciation, losing 20-30% of their value within the first few years, which can be a financial drawback for short-term ownership. On the other hand, used cars are significantly more affordable, often priced 20-50% less than new models. They also depreciate more slowly and provide access to feature-rich options at a lower cost. However, buyers must contend with potential repair needs, limited warranties, and higher interest rates on used car loans.
Ultimately, the choice depends on your budget, priorities, and willingness to balance cost with features and long-term value. At WikiFinance we recommend checking out our calculator to get a better understanding of the true cost of ownership.
