If you are looking for information about what used-car sales are expected to be like in 2023, there are several key factors to consider. One is that interest rates are going to be quite high, especially when compared to new cars. This will mean that the prices of both new and used cars are going to decline, though only slightly. The other key factor is that demand for luxury pre-owned cars is expected to drive growth in this market segment.
Prices will decline by 2.5% to 5% for new cars
In 2023, car prices are predicted to fall by 2.5% to 5%, according to the latest J.P. Morgan research. This is a significant drop and will mean more revenue opportunities for auto service departments and parts departments. Despite this, some experts are skeptical.
Car dealers will still have to face higher input costs, and fewer new models will be available to sell. However, many buyers will benefit from the drop in price. According to Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, “pent-up demand is real.”
The supply chain for the auto industry was hit hard by the global pandemic. Prices for new vehicles spiked, putting pressure on used cars. Disruptions to the supply chain created a supply shortage, which led to price increases for new cars.
This prompted the auto industry to consider ways to limit production. As a result, the used-vehicle wholesale price index has dropped 15% in the last two months.
Fortunately, these disruptions are expected to ease in the future. While the supply chain will continue to be shaky, the chip shortage will eventually resolve.
In 2023, new car sales should decline, while used car prices are projected to decrease even further. Traditionally, cheaper options have increased as consumers demand affordable vehicles.