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Car Market: What to Expect in 2023

Since the pandemic hit in 2020, the car market has gone through many ups and downs. According to Forbes, 2023 may be a year of improved stability, but not without some of its own challenges.

Market Watch: Purchase Costs
Supply chain issues, particularly with chips, have caused inventory problems during the last few years, with consumers often waiting weeks or months for the car they want. This came along with spikes in both new and used vehicle costs, peaking last Spring before gradually declining towards the end of this year. Rising interest rates and the possibility of a recession happening soon are also helping to reduce prices, although it is a slow process. According to J.P. Morgan Research, new car prices may decline up to 5% and used car prices may decline as much as 20% in 2023.

If looking to purchase a car soon, either a brand new or older model car may be the best way to go, since models between one and three years old often sell for close-to-new prices. Plus, interest rates are typically lower for purchasing new vehicles, which may make it more cost-effective. Consumer Reports stated that prices on older vehicles have dropped the fastest, so if new is out of budget, this may also be a good time to purchase an older but still reliable vehicle.

For those preferring to lease rather than own, your monthly lease payment may not see the same decline as car prices as they continue to be impacted by interest rates, inventory issues and an overall decrease in leasing since the pandemic. With vehicle values on the rise, there has also been an increase in people choosing to purchase their leased vehicle rather than renewing their contract.

Ongoing Trend: Electric Vehicles Continue to Grow in Popularity
New technology and trends are constantly evolving in the automotive industry and electric vehicles are continuing to gain momentum as we head into 2023. According to data from Motor Intelligence, the number of electric vehicles purchased by Americans more than doubled between 2019 and 2022, with increasing waitlists due to supply chain shortages. Automakers are developing electric vehicles to fit a wider variety of budgets, with many planning to roll out new EVs in the near future. With an increase in charging stations and driving range available with newer models, many people who hesitated to purchase an all-electric vehicle previously are jumping on board.

When in the market for a used car, stop by Carousel Preowned. CarouselPreowned serving Iowa City, Cedar Rapids, Davenport, North Liberty, Marion, and Coralville, IA, is proud to be an automotive leader in our community. We do our best to ensure your complete satisfaction every time you step into our car dealership. This is why we offer the widest selection of used and pre-owned cars, trucks, and SUVs and provide true ease of purchase in Iowa.

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