
By Bill Bishop, SVP of Sales and Marketing, FLD Remarketing
January 29, 2025
Two weeks ago, I was privileged to give the readers of Fleet Management Weekly my thoughts on the state of the wholesale used vehicle market in 2024. And in case you missed it, I celebrated the fact that for the first time since the pandemic started, the used white metal market fell into what I called “familiar” patterns.
Not predictable. Not forever. But “familiar.” And – for the most part – comfortable.
Not a bad thing for a used vehicle market that has experienced a virtual roller coaster ride over the past 5 years, whipping back and forth as the industry buckled under the weight of pandemic era challenges such as the lack of available vehicles, a failed drive for EV adoption, and supply chain woes that crippled everything from maintenance to remarketing to transportation – and pretty much everything in between!
So, when we can proclaim an entire year – as we did with 2024 – as being “familiar,” that’s a meaningful win. And something we hope to build on as we say goodbye to 2024 and head into the teeth of 2025.
With that in mind – and following up on our “Look Back at 2024” featured in the last two issues of Fleet Management Weekly – here are my predictions for the wholesale used vehicle market in 2025:
A Quick Look Back, The Long View Ahead
When I say that the white metal market found “familiar” patterns in 2024, that was a good thing. And something I frankly think we’ll see more of in 2025. That included a roughly 15% year-over-year depreciation across all vehicle classes, with some vehicles – class 1-2 in particular – actually gaining a percentage point, and losses going up gradually by vehicle class from there (with the key theme being that the bigger the vehicle, the bigger the loss).
The year was characterized by a huge divide in the availability of low quality, high mileage vehicles (lots of them) and the scarcity of high quality, low mileage assets, which was frankly, unlike any I have ever seen in over 35 years in fleet. This is a phenomenon we also expect to continue in 2025, as the market works its way through an incredible backlog of aging, challenged assets held well past their prime.
So, with the new year already a month old – what else do we expect to see in 2025?
Economic Factors Fall into Place
Of all the tools we use to predict where the wholesale used vehicle market might be headed, none is more important than the basket of indicators that forecast so much about what is going on in our economy: the strength of the US dollar, the number of US housing starts, the unemployment rate and consumer spending. But with a new administration taking power in the two short weeks since we wrote our “Look Back on 2024,” anyone who tells you they know where the economy is headed has a better crystal ball than we do here at Team FLD!
As it is, look for the roller coaster ride to continue for a few months as the new administration sets policy and the market reacts.
Right now, the biggest question on everyone’s mind is whether or not interest rates will come down this year. We think prime will continue to hover around 4.25% – but we’ll be keeping our eye on several other factors in 2025 including:
- Whether or not we get multiple interest rate cuts – we think there will likely be one in May or early Summer but at this point the new President is pushing for more so it’s anyone’s guess. If interest rates drop, look for housing starts and consumer spending to increase, both good signs for the used wholesale market.
- Mild volatility in the 10-year note at 4.4 to 4.8% – anything worse will dampen new home builds but likely not stop the drive to build more rental units, which should drive demand for used work trucks.
- Downward revisions in the labor market like we’ve seen in the last 4 months, a sign of weakness no one wants to continue.
- Bearish consumer sentiment – the Michigan consumer strength index down for the 1st time in 6 months in January, hopefully just a minor blip but something we’ll be watching for signs of continued weakness.
- A strong US dollar, which should keep both the cost and availability of used vehicles steady, and a few units headed overseas – even to Mexico or Canada.
- Continued consumer confidence and spending, which slid off in Q4 2024 likely because of a rotation out of consumer discretionary goods and into more practical, high priority items – something we expect to continue in 2025 as consumers remain warry of high interest rates. If we do see an interest rate cut in 2025 it likely won’t come until May or early Summer.
Individual Vehicle Classes to Mirror 2024 Valuations and Availability
While the overall valuation and availability of used wholesale vehicles fell into familiar patterns in 2024, down roughly 15% across all classes for the year, the market did see some significant variation in between vehicle classes. The main theme? The smaller the vehicle, the more it held its value and the easier it was to sell.
Here’s what we see coming down the road in 2025 with respect to the vehicle classes:
- Class 1 and 2 vehicles were basically flat in 2024, up a point or so by most accounts, something that will continue in 2025 if for no other reason than affordability. Compacts and half-ton pickups will likely perform similarly.
- The price and availability of Class 3 to 5 vehicles will depend heavily on how much money goes into infrastructure and whether alternative energy production ramps up. If these sectors are active, prices will hold and perhaps even get slightly better than in 2024.
- As they were last year, Class 6 and 7 vehicles will be heavily dependent on the freight market, which was bad in 2024 and could see further pressure in 2025 as consumers cut back on discretionary spending. Vehicles under Class 6 CDL will continue doing “ok,” depreciating slower than their bigger brethren. Larger units – like box trucks – will continue being hard to move, as the pool of available CDL drivers dwindles and more final mile providers try to move under CDL. Meanwhile, day cabs- which haven’t recovered like sleeper units – will remain soft.
A Look at the Year Ahead
As we pointed out in our 2024 year-end review, many of the talking heads that cover asset remarketing believe 2025 could be the breakout year we’ve all been waiting for since the pandemic cut short what was at the time a stable – and for the most part profitable – market. And while I do see some encouraging signs as we start the year, predicting what will happen the next 12 months is difficult – perhaps impossible – given the questions around the new administration, the trajectory of EVs and alternative fuels, and the huge backlog of low quality, high mileage vehicles.
That said, here’s what I’m keeping my eye on and a look at what we can expect in 2025:
- For the most part, 2025 will be like 2024, with comfortable, familiar depreciation values and availability. By the time we reach this point next year, I suspect that 2025 patterns will look like what we experienced in 2024.
- Smaller used vehicles will continue to sell well, while larger units will face headwinds.
- I’m confident in saying that when it comes to remarketing, we won’t see many of the 2020 off-lease vehicles we would have seen had there been a normal production cycle, but the truth is the OEMs just didn’t make that many. Instead, we’re likely to see more “challenged” 2018 and 2019 models working their way through the system until the backlog of these vehicles dwindles significantly.
EVs will continue to lose their luster and will likely become even less of a factor under the new administration – especially across the bigger classes, which never gained much traction anyway. Look for alternative fuels to increase in popularity as fleets strive for sustainability and carbon neutrality.
- OEMs will face significant headwinds as they pivot back towards ICE vehicle production and back pedal from significant capital expenditures on EV. As it is they are sitting on inventory that neither dealers nor consumers want and fleets can’t implement.
- Fleets have normalized in size, have the assets they need, and vehicle availability has improved, so I’m not expecting any huge expansion in 2025. Persistently high interest rates will keep both consumers and small businesses away from new vehicle purchases and making do with what they have – 2025 will be about affordability.
- While we have seen some recent glimmers of hope in the freight market, discretionary consumer spending is dropping off, which would have negative consequences for freight, in turn putting downward pressure on the price of used class 6 and 7 vehicles.
Stay One Step Ahead of the Market with FLD
As always, we appreciate the opportunity to share our thoughts on the wholesale used asset market and we are confident in our prediction that 2025 should be a fairly predictable, orderly year without any of the wild swings that characterized the years immediately after the pandemic. That said, we certainly aren’t taking anything for granted and our team of seasoned experts at FLD is going to do what we always do and that’s keep our ear to the ground and our eyes peeled to ensure our customers, partners and friends in fleet have the up to the minute, actionable insights they need to run better, smarter fleet operations.
Bill Bishop is SVP of Sales and Marketing for FLD Remarketing. With over 30 years of experience, he is a recognized expert on white metal and all things fleet. To ask him a question or to get a free 5-minute assessment of your company’s remarketing needs or fleet vehicles, email him at [email protected].