The automotive market closed out 2024 with several key shifts in car buyers behavior, vehicle financing, and the evolving role of electric vehicles (EVs). Experian’s Q4 2024 report paints a picture of a market adjusting to economic pressures, rising interest in alternative fuel vehicles, and shifting generational preferences.
Here’s what stood out in the final quarter of the year, and what it means for buyers, dealers, and industry watchers.
Automotive Finance Trends: Slight Relief for Car Buyers
While prices are still high, there are signs that financing pressure may be easing slightly for car buyers:
- Average used vehicle loan amounts dropped to $26,468, a decrease of $344 compared to the same time last year.
- New vehicle monthly payments decreased slightly year-over-year, falling by $1 to $742.
- Used vehicle monthly payments saw a slightly larger dip, falling $10 year-over-year to $525.
These small declines in new and used car loans aren’t game-changers, but they suggest some stabilization in vehicle pricing and lending. As interest rates hold steady or inch downward, car buyers may continue to see marginally better terms, especially on used inventory.
EVs and Hybrids Continue to Carve Out Market Share
Electric vehicles continue to gain ground, not just in sales, but in leasing behavior and repeat ownership:
- EVs accounted for over 9% of all new vehicle purchases in Q4.
- Over 50% of EVs were leased, meaning EVs made up nearly 20% of all new vehicle leasing activity.
- Among current EV car buyers, 78% replaced their EV with another EV in the past 12 months, a strong signal of satisfaction and loyalty.
Still, battery electric vehicles make up a small share of vehicles on the road overall. According to the data:
- Battery EVs account for just 1.4% of vehicles in operation.
- Plug-in and gas hybrids combined represent 3.5% of total vehicles on the road.
In other words, while new EV adoption is accelerating, the full shift to electric is still a long-term play.
Sedans Make a Modest Comeback, Driven by Gen Z
While trucks and SUVs still dominate, compact cars and sedans saw a small uptick in Q4:
- Over 18% of new retail registrations were for traditional cars, signaling a slow but noticeable comeback.
- Gen Z consumers registered a higher percentage of new cars than other generations, showing a preference for smaller, likely more affordable vehicles.
This generational behavior may reflect both economic practicality and urban driving needs. As Gen Z continues entering the auto market in larger numbers, automakers could see renewed interest in compact and fuel-efficient models.
Toyota Leads in Market Share
Toyota held its position as a dominant force in Q4 2024:
- The brand led all new retail car registrations with a 21.61% market share.
- The Toyota Camry stood out as the top individual model, holding a 10.49% share of all new retail car registrations.
Toyota’s stronghold in the sedan segment, combined with its expanding hybrid and EV lineup, makes it a go-to choice for value-focused and eco-conscious consumers alike.
Car Buyers Want Digital, But Personal, Communication
Understanding how to reach today’s buyer is just as important as knowing what they want to drive. Experian’s report also highlights communication trends among the top lifestyle segments of new car buyers:
- Email and social media are now the top two preferred channels for engaging with potential buyers.
This underscores the importance of a digital-first approach for dealerships and marketers, but not just any digital strategy. Consumers want personalization, relevance, and convenience in how they receive offers and updates.
What This Means for Car Buyers Moving Into 2025
The Q4 2024 trends reveal an auto market that’s balancing familiarity with change:
- Financing costs remain high, but they’re showing signs of softening.
- EVs are entering a new phase of growth, especially through leasing.
- Gen Z is reshaping the definition of a “default” new car buyer.
- Brand loyalty remains strong where value and reliability intersect (hello, Toyota).
- And how you reach customers now matters as much as what you’re selling.
As we head into Q2 2025, expect continued shifts in buyer demographics, more aggressive competition in the EV and hybrid space, and a growing demand for digital-first, customer-friendly retail experiences.
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