What the Ten New Predictions for the U.S. Auto Industry Mean for Buyers Going Into 2023

As the first month of 2023 comes to a close, there are plenty of predictions going around about what the year holds for the automotive industry.

Recently, Cox Automotive released a presentation on the future of the automotive market based on information from 2022, and we can get 10 key predictions from it.

What are these predictions, and what do they mean for both car dealerships and buyers?

The Ten Predictions Cox Automotive Had After Reviewing 2022’s Economic Conditions

Here’s the jist of the ten main predictions made by Cox Automotive after their presentation on sales forecasts and industry insights for 2023.

1. Economic issues will put pressure on an auto market that’s already stretched thin by electric vehicle investments.
2. New vehicle inventory levels will increase – while demand is expected to decrease.
3. Total vehicle sales will fall in 2023 because while new vehicle sales will increase, used vehicle sales will decrease.
4. Electric vehicle sales will pass 1 million in the U.S. for the first time.
5. Used vehicle values will continue to decrease in 2023.
6. The biggest issue for car buyers will be vehicle affordability.
7. There will be a record-high number of cash deals for vehicles.
8. Services offered by car dealerships will be in higher demand and create more revenue compared to sales.
9. 50% or more of car buyers will use online tools over in-person visits to dealerships.
10. Fleet purchases will lean more toward electric vehicles due to federal incentives.

Breaking Down What the Ten Predictions Actually Mean

Now here’s what that list actually means for consumers and car dealerships:

As new vehicle inventory increases, pressure will no longer be placed solely on used cars. This means pricing for used cars will fall alongside demand for vehicles decreasing due to vehicle affordability problems.

Because of that, cash purchases will be made to avoid loans and leases with high-interest rates, and total sale revenue will decrease. More revenue will come from servicing vehicles instead because people will hold onto their cars longer.

In the meantime, previous federal regulations and remote interaction options introduced during the pandemic will push more online shopping and electric vehicle purchases than ever before – changing how dealerships deal with buyers and how the automotive market functions in general forever.

It’s very complicated and very simple all at the same time – because there are many reasons why and how, but the important point is that things are changing in the automotive industry.

How This Will Change the Car Buying Experience for Today’s Buyers

That just leaves what you, as a buyer, need to know: online shopping will become a better option for researching and purchasing vehicles in the near future. You’ll want to look into electric vehicles, as they could become more prevalent and affordable than gas cars.

And last but not least, talk with your local car dealerships about low-interest-rate purchase plans or try to pay for your vehicle in cash to avoid affordability issues. Keep watching out for more automotive market news to find out what to do next!