The 2025 Conference of Automotive Remarketing (CAR), held March 18-20 in San Diego, annually brings together consignors, auctions, dealers, and remarketing companies to discuss the state of automotive remarketing and the automotive market in general.

I was only able to attend on Wednesday, but from the sessions I attended, I gleaned a host of trends in the shifting economic conditions, affordability challenges, fleet sales, and EV remarketing challenges in the used vehicle landscape. 

Here are eight takeaways shaping the industry right now.

A Wave of Off-Lease EVs is Coming — Is the Market Ready?

The used EV market is about to experience a surge, driven by high lease rates since 2023 and expiring federal incentives. "Six percent of all lease returns in 2025 will be battery-electric or plug-in hybrid. Next year, that jumps to 14%," said Scott Case, CEO of Recurrent.

Many of these EV leases were heavily subsidized under Inflation Reduction Act (IRA) incentives, which means original lessees paid significantly less than market rates. As these vehicles flood the used market, their battery condition will outweigh mileage as the key resale factor. 

"Battery health is the new odometer in EV remarketing," Case added, emphasizing that buyers are prioritizing battery diagnostics over mileage when evaluating used EVs.

Remarketers and dealers must provide battery condition reports at resale, or they risk a lack of buyer confidence in the growing EV secondary market.

Vehicle Affordability Is a Growing Concern

Rising interest rates, inflation, and higher monthly payments are pricing out many consumers, yet demand remains strong. "Interest rates on used car loans are the highest they’ve been in 25 years. Affordability is the paramount issue," said Jeremy Robb lead economist for Manheim at Cox Automotive.

The average monthly car payment is now $756, up from $590 just five years ago, making new and used vehicles less accessible. Consumers are holding onto their vehicles longer, reducing turnover in the used market and keeping supply tight.

The market continues to show a K-shaped recovery, where luxury and high-end vehicles are selling, but lower-income buyers struggle to find affordable options. "December was a strong month for new car sales, but we saw a surprising drop in February," said Eric Lyman, vice president at Black Book. 
As more buyers return to market with negative equity in their trade-ins, pricing pressure on the used vehicle segment will intensify.

Used Car Prices Are Falling, But Remain Historically High

While the post-pandemic used car price bubble is deflating, values are still well above pre-COVID levels. "Used vehicle retention is 28% above 2020 trends but expected to decline by another 15% in the next 18 months," said Forrest Dougan of Openlane.

Dealers are also seeing shrinking profits on both new and used vehicles. On new vehicles, dealer profits are projected to fall from $2,300 per vehicle in 2024 to $1,700 in 2025, according to data presented by Dave Sargent of J.D. Power.

“More high-interest-rate buyers are coming back to market with no equity in their trade-ins,” said Sargent. “This will put additional pressure on used prices and affordability.”

While dealer profits have declined, retail prices remain high due to ongoing supply constraints. A lack of lease returns is further tightening supply, with shortages expected through 2026-2027.

Although used vehicle prices will decline, persistent supply limitations will prevent a dramatic drop.

EV Adoption Slowing Despite More Models on the Market

Despite a growing selection of EV models, sales growth has flattened recently. "There are more EVs on the market than ever, but demand isn’t growing as fast as expected," said Sargent.

While 36 new EV models launched in the past two years, demand remains concentrated in a few key states, such as Colorado, Texas, Florida, and New York. Surprisingly, EV sales in California actually declined year-over-year. 

Charging infrastructure remains a major concern for potential EV buyers. "A shocking 19% of public chargers were reported as nonfunctional when EV owners tried to use them," Sargent added. With less than 25% of consumers saying they are “very likely” to buy an EV next, confidence in the market remains shaky.

Concerns about battery degradation and long-term ownership costs continue to deter buyers. "Used EV buyers are scared of battery health because they don’t have experience with it. They worry an EV will die like an old iPhone," said Case.

Without improvements in charging infrastructure and battery transparency, consumer confidence in used EVs will remain low.

Tariffs Would Disrupt Both New and Used Vehicle Pricing

The potential for 25% tariffs on imported vehicles and parts could shrink new vehicle sales by 2.3 million units. "Tariffs will create ripple effects across the industry. Even if a vehicle isn’t directly impacted, automakers will shift pricing strategies, and that will affect both new and used inventory," said John Coles, VP of data science and Analytics at ACV Auctions.

Among the brands most exposed to import tariffs are:

• Toyota (48% of U.S. sales from imports)

• Chevrolet (58%)

• Hyundai (66%)

Rather than just raising prices on tariffed models, automakers are expected to spread the costs across their entire lineup, making even U.S.-built cars more expensive.

Higher new car prices could inflate used car values, disrupting depreciation trends and pushing more buyers into the used market.

Rental Fleets Want More Vehicles, But Supply is Tight

Rental car companies are eager to refresh aging fleets, but competition with retail buyers is limiting access. "Fleet buyers want more vehicles to refresh their aging inventory, but they're competing with retail buyers, making it difficult to secure supply," said Robb.

With rental fleets holding onto vehicles longer, high-mileage units are becoming more common at auction. While new vehicle incentives will help, supply constraints will keep fleet sales below pre-pandemic levels for the foreseeable future.

EV Remarketing Requires a New Approach

Traditional Certified Pre-Owned (CPO) strategies don’t work for EVs — battery condition is now more important than cosmetic repairs. "Confidence in battery life will determine if EV remarketing succeeds or fails," said Case.

To succeed in the used EV market, auctions and dealers must offer:

• Battery condition reports for used EVs

• New CPO programs focusing on battery health rather than mileage

• Education for buyers on range expectations and battery performance

"The used EV market will only grow if consumers trust that batteries will last," Case emphasized.

Market at Crossroads

The remarketing industry is at a crossroads, balancing affordability concerns, EV adoption struggles, policy shifts, and evolving consumer expectations.

Affordability issues will persist, but the used vehicle market remains resilient. EV remarketing must evolve with better diagnostics and consumer education. Tariffs and economic uncertainty could create further volatility in both new and used vehicle pricing.

Dealers, fleet operators, remarketers, and consignors of all types must adapt now to stay ahead of these market shifts.