Auto retail’s four different markets in 2025

March 10, 2026

The U.S. auto retail market in 2025 did not follow a single trend. Instead, it unfolded as four distinct phases shaped by policy shifts, incentives and consumer behaviour, according to a new report from digital marketing firm Shift Digital.

The report, titled Auto Retail in 2025: Four Quarters, Four Different Markets, noted that each quarter of the year produced dramatically different conditions for dealers and shoppers across the United States.

“2025 was a year of rapid change for the automotive retail industry,” said Shift Digital CEO James Connelly in a statement. “From tariff concerns to expiring EV incentives, consumer behaviour shifted quickly, forcing dealers and manufacturers to adapt their strategies in real time.”

The year opened with a surge in vehicle demand as U.S. buyers moved to purchase ahead of expected tariff-related price increases. That momentum shifted in the second quarter after tariffs were introduced, increasing affordability concerns and putting pressure on vehicle pricing.

In the third quarter, a new legislative change triggered a rush toward electric vehicles. The U.S. Congress passed a bill in early July that would phase out the US$7,500 federal EV tax credit by the end of September, prompting consumers to accelerate EV purchases before the incentive expired.

By the fourth quarter, however, demand softened as consumers grew cautious while vehicle prices approached near record highs. The report also highlights changes in digital retail performance across lead sources.

Dealer websites produced the strongest results, with leads closing at a rate of 11.8 per cent in 2025. OEM brand sites generated a 7 per cent close rate, while third-party lead providers lagged significantly at 2.2 per cent.

Shift Digital said the findings underscore the importance of first-party digital channels for dealers navigating volatile market conditions.

The U.S. auto retail market in 2025 did not follow a single trend. Instead, it unfolded as four distinct phases shaped by policy shifts, incentives and consumer behaviour, according to a new report from digital marketing firm Shift Digital.

The report, titled Auto Retail in 2025: Four Quarters, Four Different Markets, noted that each quarter of the year produced dramatically different conditions for dealers and shoppers across the United States.

“2025 was a year of rapid change for the automotive retail industry,” said Shift Digital CEO James Connelly in a statement. “From tariff concerns to expiring EV incentives, consumer behaviour shifted quickly, forcing dealers and manufacturers to adapt their strategies in real time.”

The year opened with a surge in vehicle demand as U.S. buyers moved to purchase ahead of expected tariff-related price increases. That momentum shifted in the second quarter after tariffs were introduced, increasing affordability concerns and putting pressure on vehicle pricing.

In the third quarter, a new legislative change triggered a rush toward electric vehicles. The U.S. Congress passed a bill in early July that would phase out the US$7,500 federal EV tax credit by the end of September, prompting consumers to accelerate EV purchases before the incentive expired.

By the fourth quarter, however, demand softened as consumers grew cautious while vehicle prices approached near record highs. The report also highlights changes in digital retail performance across lead sources.

Dealer websites produced the strongest results, with leads closing at a rate of 11.8 per cent in 2025. OEM brand sites generated a 7 per cent close rate, while third-party lead providers lagged significantly at 2.2 per cent.

Shift Digital said the findings underscore the importance of first-party digital channels for dealers navigating volatile market conditions.