Used-Car Sales Expectations in 2023

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.

Demand

Used Cars Market Trends 2023

The used cars market has changed a lot in the last few years, and it is predicted that the trend will continue in 2023. Some of the factors that will contribute to this are the supply chain constraints, the rising interest rates, the cost of living crisis, and the trade-in values. If you are in the business of selling used vehicles, you should keep in mind these trends.

Cost-of-living crisis

The global automotive industry is coping with a cost-of-living crisis that has been affecting used car prices. It is difficult to pinpoint a specific trigger for this but high inflation is at least a factor.

Last year, the price of used cars rose by more than five percent. However, analysts have predicted a slowdown in prices over the next few years.

A recent study by Autovista Group found that the market is reaching a turning point. This trend is likely to continue into the future, according to the firm.

An average three-year-old vehicle’s %RV fell a whopping 2.6 percent month-on- month in December. Meanwhile, the Manheim Used Vehicle Value Index hit 236.3 in January 2022.

While prices for vehicles continue to fall, they are still well below the historical average. Analysts have warned that used vehicle prices could tumble 20%-30% in the coming two years.

One way to gauge how used car prices will evolve is to look at the trend in new car sales. While there has been a significant drop in sales in the first half of 2022, there has also been a rise in registrations.

Supply-chain constraints

The global automotive supply chain is undergoing significant disruption. These challenges include labor shortages, shifting demand, and structural issues. Some companies are facing significant financial losses due to these constraints.

Automotive OEMs can rely on third-party logistics providers to help …