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Autumn Update: Car Oracle Breaks Down the 2023 Auto Market's Key Trends

Autumn Update: Car Oracle Breaks Down the 2023 Auto Market's Key Trends

Written By

Lewis C. Smith

Published

Oct 16, 2023

OEM Price Changes
OEM Price Changes
OEM Price Changes
OEM Price Changes

Stay ahead in car buying with insights on 2023 auto market trends. Car Oracle breaks down key shifts for informed decisions.

The Downward Shift in Average Vehicle Prices

Prices of new cars have seen a dip this year, according to an October 2023 update from Cox Automotive. If you purchased a vehicle in September 2023, the average price was down 3.4% from January 2023. With the average transaction price standing at $47,899 in September, this trend shows the market's response to increasing inventory and attractive incentive offers.

Impact of the UAW Strike on Big Automakers

Impact of the UAW Strike on Big Automakers

The United Auto Workers (UAW) strike in 2023 had a ripple effect on some of the most significant players in the industry. General Motors, for instance, curtailed its incentives in September, while Ford and Stellantis increased theirs. The reason? Inventory levels. GM’s inventory was considerably low compared to Ford and Stellantis, and this impacted their pricing strategy.

Luxury Cars – A Dive into Tesla’s Pricing

The luxury segment has seen some fluctuations in 2023. Overall, luxury vehicle prices decreased, with Tesla taking a lead in slashing prices. The Model 3's price plummeted by more than 26% from the previous year, settling at $41,484—putting Tesla’s pricing below some big names like Acura, Lexus, Infiniti, and Volvo.

It's also worth noting that while Tesla's aggressive price cuts are making waves, other luxury brands, such as Audi, Mercedes, and Porsche, are seeing their transaction prices go up. However, Tesla's approach seems to be setting a trend, as the overall luxury market leans towards reduced prices coupled with higher incentives.

Electric Vehicles (EVs) – An Era of Affordability?

Electric vehicles have been all the rage, especially with environmental consciousness on the rise. 2023 saw EV prices decline, mostly driven by Tesla’s pricing strategy. The average price for an EV in September stood at $50,683—a significant decrease from the $65,000 mark just a year ago. With more models being introduced and high inventory levels, EVs are becoming more accessible to the broader public.

Understanding Auto Incentives

Incentives have reached a two-year peak in September 2023. These offerings, designed to lure customers, reached an average of $2,368 per vehicle. Despite this recent increase, they remain historically lower compared to 2019 and 2020.

Car Oracle's Recommendations

It's evident that the car industry is in flux, with shifting prices, inventory changes, and evolving consumer choices. Whether you're considering an internal combustion engine vehicle, an EV, or a luxury model, understanding these market dynamics is crucial. Our CarOracle Auto Buying Program can further simplify this journey for you, offering personalized advice and ensuring you get the best deal.

In the ever-changing world of automobiles, staying informed and making savvy choices is the key. Let Car Oracle be your trusted guide in this exciting journey!

Industry News & Trends FAQs

Why are more engines turbocharged and what are the downsides?

Turbocharging is becoming increasingly common in modern engines due to its ability to balance efficiency and performance. Turbochargers allow manufacturers to use smaller, more fuel-efficient engines, while still delivering the power of a larger engine when required. This alignment with stricter global emissions standards and consumers' desires for economical vehicles makes turbocharging an attractive feature.

However, turbocharging isn't without its downsides. The additional complexity introduced by turbochargers can lead to more potential points of failure, potentially resulting in higher maintenance costs. The increased power generated by turbochargers can also place additional stress on engine components, which could lead to accelerated wear and tear.

Some turbocharged engines require premium fuel to operate optimally, which can increase the vehicle's running costs. Additionally, the phenomenon known as "turbo lag" can create a delay between the driver pressing the accelerator and the turbocharger providing the extra power. This can impact the vehicle's responsiveness and overall driving dynamics.

Importantly, turbocharged engines can also produce a significant amount of heat, especially when the turbocharger is placed within the "V" of a V-shaped engine. This trapped heat can potentially degrade plastic parts over time, further contributing to potential maintenance issues. Therefore, while turbocharging can offer significant performance and efficiency benefits, it's important to be aware of these potential downsides when considering a vehicle equipped with a turbocharged engine.

How do current fuel prices impact vehicle values?

Current fuel prices can significantly impact the values of vehicles, especially those with different levels of fuel efficiency. When fuel prices rise, demand often increases for fuel-efficient cars, such as hybrids and electric vehicles, which can raise their resale values. Conversely, vehicles with poor fuel efficiency, like some SUVs and trucks, may experience a decrease in demand and a corresponding drop in value.

Interestingly, this isn't always rational behavior. The changes in fuel prices usually translate to a relatively small proportion of the total cost of vehicle ownership when you consider other factors like depreciation, maintenance, and insurance. Despite this, the psychological impact of higher prices at the pump can sway consumer behavior significantly, indicating that the effect of fuel prices on vehicle values is not always strictly rational.

How does a shortage of new vehicles impact the used vehicle market?

A shortage of new vehicles often leads to increased demand and higher prices in the used vehicle market. This is because customers who are unable to find or afford new vehicles may turn to the used market instead.

What is the difference between the average listing price and the average transaction price?

The average listing price is the asking price set by dealerships, which is typically higher than what customers end up paying. The average transaction price, on the other hand, is the final price paid by the customer, which often includes discounts, incentives, and negotiations.

What is 'days supply'?

Days supply refers to the number of days it would take to sell out the current inventory without any additional supply. It is calculated by dividing the current inventory by the average daily sales rate. For instance, a 60 days' supply means it would take 60 days to sell out all the vehicles in the current inventory if no new vehicles are added.

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CarOracle is a California-licensed automotive dealer, License No: 43082, with an autobroker's endorsement, enabling us to represent consumers in the purchase or leasing of new and used vehicles.

©2024 CarOracle. All rights reserved

CarOracle is a California-licensed automotive dealer, License No: 43082, with an autobroker's endorsement, enabling us to represent consumers in the purchase or leasing of new and used vehicles.

©2024 CarOracle. All rights reserved

CarOracle is a California-licensed automotive dealer, License No: 43082, with an autobroker's endorsement, enabling us to represent consumers in the purchase or leasing of new and used vehicles.

©2024 CarOracle. All rights reserved