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How long will the high demand and prices last? Read on to find out what dealers can expect in 2023 for inventory, pricing, and other new and used car market trends.
While the chip shortage and low-inventory climate won’t fully disappear, we do expect continued improvement as the year goes on. Moving in to 2023, as a whole, inventory levels have been steadily on the rise, now up 59% since January according to ZeroSum data.
However, it is important to note that the new and used vehicle markets are seeing very different trends. New vehicle inventory has been increasing since July 2022, gaining around 8-12% each month. At the same time, used vehicle inventory has dropped each month since August 2022 by about 1-3%. This is the opposite of what we saw at the start of 2022 when there was more used inventory becoming available than new. 2023 is a turning point for the market in terms of inventory, and we can expect to see new cars become much easier to come by while used cars will be more scarce.
Despite there being more available new inventory, new car prices have continued to increase into 2023, up each month since October 2022. At the start of 2022, the average price of a new car was $46,451, $28 above MSRP. Now, the current average price sits at $48,813 which is just $192 below MSRP. With so much more new inventory being added each month, upward pressure on new vehicle prices should begin to ease in 2023. For dealers, this means that acquiring and strategically pricing new vehicles will be more crucial than ever to their strategies.
On the other hand, used car prices have come down from $33,464 in January 2022 to $32,587 at the end of the year. With less used car inventory available, it is possible that prices will begin to creep back up over the course of 2023.
Although Internal Combustion Engine (ICE) vehicles dominated the automotive landscape in 2022, accounting for 87% of average inventory and 86% of vehicles moved, electric vehicles are rapidly increasing in both popularity and availability. Since October 2022, ZeroSum data has shown that pure electric and hybrid electric vehicle inventory has increased by 20%+ each month.
Electric cars are now becoming more widely available, and consumers are buying them. With volatile gas prices throughout the year that reached over $5/gallon, and an up to $7,500 EV tax credit now being offered, Americans have more reason than ever to make the switch. ZeroSum data confirms this demand, showing that in 2022, electric vehicles stood out in terms of turn rate, improving by 16% since 2021.
To view more detailed data from 2022 and predictions for 2023, read the Special Edition ZeroSum Market First Report here.
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About ZeroSum
ZeroSum is a leader in software, marketing, and data. Powered by its SaaS platform, MarketAI, ZeroSum is simplifying and modernizing automotive marketing by leveraging artificial intelligence, data, and scaling ability to acquire new customers. ZeroSum is the first and only company that matches consumer demand with automotive data in real time. For more information, visit https://www.zerosum.ai/.
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