March 13, 2023
2022 brought record-breaking prices and inventory issues to the car market like we have not seen in years. As we enter 2023 though, experts are predicting these prices will start to level out as supply chains continue to recover from the effects of COVID-19 and the number of shortages decreases.
With stabilization on the horizon, we are wondering two things: what will the new normal look like for the used car market, and what’s the best way to keep their inventory at the top of consumers’ minds?
4 Trends You’ll See in 2023
In 2023, a “stable” automobile industry will look very different than it did in pre-pandemic times. Amidst the many changes that have come about because of the pandemic, there are four major trends that we believe will influence the industry the most.
Rising EV Adoption Rates
The market for electric vehicles (EVs) exploded in recent years as more brands and models were introduced to the market. Cox Automotive reported that despite 2022’s down market, EV sales increased throughout the year and accounted for nearly 6% of total vehicle sales. This is almost double the total market share just one year prior.
Declining Prices for Used Cars
Many experts believe used car prices have hit their peak in 2022 and are now predicting significant decreases over the next year. J.P. Morgan Research claims consumers can expect used car prices to drop 10-20%. One of the most interesting parts of this prediction is that the drop in price for used cars is expected to only apply to cars made over four years ago. Any used cars in the one-to three-year-old range won’t see a significant price decrease.
Emerging Modern Retail Options
Companies like Carvana have had a revolutionizing effect on car sales by offering completely digital retail experiences. A recent Digitization of End-to-End Retailing (DoEER) study by Cox Automotive revealed that 64% of potential car buyers want more portions of the purchasing process to happen online. Some of the most common steps in the sales process that customers prefer to do digitally include being able to browse inventory from home, digitally complete paperwork for test drives and purchases, and participate in price negotiations in an online setting. Retail options are predicted to continue to be modernized for the digital age in 2023.
Opportunities for Dealerships to Shine
These four major trends are working together to create a brand-new world for the buying and selling of cars — and it’s full of opportunities!
As the price of used cars drop, they become more accessible to a greater number of consumers. Demand will naturally increase, presenting more sales opportunities. Additionally, many EV manufacturers have been unable to keep up with demand due to shortages of semiconductors and other parts needed to build the vehicles. As a result, their waiting lists are long and not all consumers are willing or able to hold out, causing them to be more open to purchasing a used EV that they can test drive and take home on the same day.
One of the best ways dealerships can prepare for 2023 is to digitize as much of their sales process as possible. Posting inventory on marketplaces like OfferUp will increase accessibility and allow consumers to start the buying process from home. Implementing an online scheduling system for test drives can help keep the paperwork process organized and make it easier to manage the influx of interested parties. Not only will it save time and money on the administrative side of things, but it will also allow for greater personalization while freeing up time that can now be spent delivering excellent customer service.
Dealerships that take steps to streamline their sales process now will be miles ahead of the competition and ready to handle the increased interest in used cars.
Reach More Car Buyers with OfferUp Listings
Ready to start digitizing your inventory? Make sure you’re posting it to the right place and have the tools you need to measure success. Used car buyers often start their car search by checking for sale posts on secondhand marketplaces like OfferUp. It can be a great way to grow your dealership!
When you partner with OfferUp as a member of our Verified Dealer Program, we help you reach local buyers at just the right time. Promoted placements, CRM, and a dealer profile with chat options are just a few of the tools you’ll have at your fingertips to help get your listings in front of our 20 million+ monthly users. Become a Verified Dealer at OfferUp today!