Car Market Predictions for 2023: Insights from MotorVero

Recovering Inventory and Consumer Trends

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The automotive market faced significant challenges in 2022, with low inventory levels and elevated prices. As we move into 2023, potential buyers are eager to know whether conditions will improve. While uncertainties remain, MotorVero analysts predict notable trends in inventory recovery, pricing, and consumer behavior.

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1. Economic Concerns Will Influence Buying Decisions

Although the Consumer Price Index (CPI) showed signs of improvement in late 2022, consumers are still feeling financial pressure. Elevated prices for everyday goods have led to cautious spending, which may delay large purchases like vehicles. Many households remain focused on managing daily expenses, potentially impacting the automotive market well into 2023.

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2. Stable New Car Prices with Potential for Incentives

Manufacturers are unlikely to lower new car prices significantly. However, discounts and dealer incentives may gradually return, particularly as inventory levels improve. Transaction prices, which include market adjustments, are expected to decrease, offering some relief to buyers. Additionally, the growing presence of electric vehicles (EVs), typically priced higher than internal combustion engine (ICE) counterparts, may shift market dynamics.

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3. Inventory Recovery: New vs. Used Vehicles

New vehicle inventory has been steadily increasing, although it may not return to pre-pandemic levels. On the other hand, used vehicle inventory faces slower recovery due to reduced availability of late-model cars. Owners may require stronger incentives to trade in their vehicles, and buyers might need to consider older models, expanding their search from 1-4-year-old vehicles to 1-8-year-old options.

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4. Longer Lot Times for New Vehicles

With improved inventory levels, new vehicles are staying on dealership lots longer than during the height of the shortage. Average lot times have increased from three weeks to around four weeks, giving consumers more opportunities to find the vehicle they want without feeling rushed. This gradual normalization benefits buyers by easing competition for in-demand models.

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5. Buyers Returning to the Market

As inventory recovers, more buyers are expected to re-enter the market. According to MotorVero research, "need" buyers—those driven by aging vehicles or changing household needs—account for the majority of current shoppers. Discretionary buyers, motivated by desire rather than necessity, may also return as economic confidence improves, with affluent buyers leading this trend.

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6. Growing Interest in Electric Vehicles (EVs)

The EV market saw remarkable growth in 2022, with sales increasing by 56% year-over-year. Consumer interest continues to climb, as evidenced by a MotorVero survey showing 59% of respondents were likely to consider an EV for their next purchase. Legacy automakers like Ford and Chevrolet are closing the gap with Tesla, introducing diverse EV models to meet consumer demand. However, concerns about price, charging infrastructure, and range remain barriers for some buyers.

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7. Increased Online Car Buying Options

Online vehicle purchasing is becoming increasingly popular. A MotorVero survey revealed that 60% of shoppers are interested in completing their next vehicle purchase entirely online. Features such as online financing, trade-in arrangements, and digital paperwork management are highly sought after. MotorVero's platform makes it easier than ever to finalize deals online and arrange for vehicle delivery or pickup, catering to a wide range of buyer preferences.

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Adapting to a Shifting Market

Whether you're considering a new or used vehicle, staying informed about market trends is crucial. MotorVero remains dedicated to providing accurate insights and seamless solutions for buyers and dealers alike.

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By understanding the dynamics of inventory recovery, pricing, and consumer preferences, you can make confident, informed decisions in 2023.