How Will Car Shopping in 2023 Look Different?

Buying a new car isn’t always a quick or simple process. Buyers need to understand their budget and their driving needs in order to find their ideal vehicle. Each year, new models hit the showrooms and buyers might have more choices than the previous year for vehicles in their price range.

Economic factors also impact the journey, though. In the past few years, demand for cars increased. A shortage of microchips lowered supply and buyers might have paid more for vehicles if they could even find the models they wanted. How will car shopping in 2023 look different? Buyers might brace for these positive and negative changes during their shopping journey:

• Higher prices
• Discontinued low-budget models
• Lower-priced electric vehicles
• More online resources
• Higher interest rates

Are Sticker Prices Higher?

The price of new cars continues to escalate; according to Kelley Blue Book (KBB), the average sale price is now more than $49K. Those shopping for a new car, though, might not face the same rising sticker prices as last year.

KBB explains that car prices are now rising for a simple reason: people are choosing more expensive models. Thankfully, the site notes that low supply isn’t impacting the price at dealerships like it did the past few years.

While buyers could be moving towards pricier vehicles, this doesn’t mean that inexpensive models are unavailable. Buyers can still find economical vehicles that don’t soar into luxury price ranges; however, the selection might be more limited.

Fewer Low-Budget Models

While budget-conscious buyers can find lower-priced vehicles, the options for vehicles priced at under $20K are more limited for 2023. Currently, only three 2023 vehicle models are priced less than $20K:

• Nissan Versa
• Mitsubishi Mirage
• Kia Rio

Nissan Versa

The 2023 Nissan Versa is currently the least expensive new vehicle on the market. The Versa starts at $15,730 and also is incredibly fuel efficient; it can get an estimated 32 MPG in the city and 40 MPG on the highway. The 2023 Nissan Versa also received a five-star safety rating from the National Highway Traffic Administration (NHTSA).

Mitsubishi Mirage

The 2023 Mitsubishi Mirage is the most fuel-efficient vehicle on the market (that isn’t a hybrid). The Mirage can get an estimated 36 MPG in the city and 43 MPG on the highway. It has a starting MSRP of $16,245.

2023 Kia Rio

The 2023 Kia Rio starts at $16,750. Like the Versa, it also offers great fuel efficiency; the Rio can get an estimated 32 MPG in the city and 41 MPG on the highway.

These Small, Fuel-Efficient and Affordable Cars Have Been Discontinued

The list of small and affordable vehicles is shrinking. In fact, two of the most affordable models on the market were discontinued after the 2022 model year.

Chevrolet discontinued the small Spark after the 2022 model year. The Chevrolet Spark was the most affordable car on the market for 2022; it was priced at only $13,600. The Spark could get an estimated 30 MPG in the city and 38 MPG on the highway.

Hyundai discontinued its budget-friendly compact Accent. The 2022 Accent was the last of the model; the 2022 Accent started at $16,645 and could get an estimated 33 MPG in the city and 41 MPG on the highway.

The Price of Electric Vehicles is Becoming More Affordable

While the list of standard cars that are less than $20K has shrunk from 2022 to 2023, buyers will find that the price of some electric vehicles is starting to become more affordable. These cars won’t be priced below $20K, but a few start at less than $30K.

While the Nissan Leaf was once the most affordable electric vehicle, Chevrolet’s Bolt EV is now more affordable than the Leaf. The 2023 Chevrolet Bolt EV has a starting MSRP of $26,500; in addition, buyers might qualify for a Federal Tax Credit which could further offset the price. The Bolt EV offers an estimated range of 259 miles.

Chevrolet also offers the 2023 Bolt EUV, which is an electric small sports utility vehicle. The Bolt EUV starts at $28,795, and, again, buyers might qualify for a tax credit to further offset this cost. The EUV has an estimated range of 247 miles.

Tesla Lowers Price on EV Models

The electric vehicle market was rocked when Tesla announced that it would lower the price of a few of its models. The electric vehicle manufacturer reduced the cost of the Model Y by 20 percent. The Model 3 also saw a price reduction.

In response, Ford nudged down the price of its Mustang Mach-E. However, according to an NPR article, GM wasn’t planning to cut the price on its Cadillac Lyriq (another Model Y competitor).

The move by Tesla to cut the prices on a few of its models could open up the market for more buyers who previously found that electric vehicles were too pricey for their budget. For those who can qualify for a federal tax credit related to the electric vehicle purchase, the overall price could be even lower.

More Online Shopping Resources for Buyers

For car shoppers who are focused on the new car search in 2023, another trend could benefit their journey. As the pandemic moved car buying online for dealerships, they had to adapt websites to accommodate for more online buying options.

While the pandemic is no longer impacting businesses in the same way that it did a few years ago, the changes that influenced haven’t abated—and, for buyers, these changes are positive. As buying moved online, businesses had to increase resources and offerings online for those shopping at home. Even the car buying process became a virtual experience.

Shopping for a new car in 2023 could offer buyers more online resources via dealership websites. Some dealership sites might include augmented reality showrooms that allow buyers the option to explore vehicle models via mobile devices. Dealerships also could offer virtual test drives that allow a car to be delivered to the buyer; in addition, buyers might be able to schedule a test drive online.

Virtual assistants or dedicated online personnel could be available to chat online with customers, too. Customers can research inventory via the dealership’s website and inquire about financing, availability or other details via an online chat portal.

Buyers Might Face Higher Interest Rates

Buyers shopping for a new car in 2023 will face yet another impactful and expensive issue that will increase the cost of their vehicle. The Federal Reserve has raised interest rates consistently in an attempt to rein in inflation.

As interest rates are increased by The Fed, consumers also might face higher rates related to auto loans. KBB reports that the average interest rate for new car loans is now more than eight percent. However, financing a used car is much more expensive; KBB reports that the average interest rate for used cars is now more than 12 percent.

An individual’s credit score impacts the interest rate, as do economic factors. In addition, some vehicle models could be eligible for special interest rate promotions; however, these deals are only available for qualified buyers.

Even those with great credit scores might face higher interest rates compared to what they would have been offered in the past. Buying a new car in 2023 might require a bit more research for buyers to find their best prices and their best loan options.

For those who find that a new car is more expensive than they anticipated, choosing a longer loan might be tempting in order to keep monthly payments lower. However, longer-term loans will lead to paying more in interest over the life of the loan.

How to Be a Savvy Car Shopper in 2023

While inventory might not be crunched at dealerships, shopping for a new car in 2023 could be a mixed bag for buyers. Again, interest rates could be higher as The Fed increases rates. In addition, fewer car models are priced less than $20K; this means that buyers who have less to spend might have fewer choices in their price range.

Dealership websites, though, could offer more resources for shoppers. Some might provide immersive tools like augmented reality showrooms or other features. Buyers might even be able to schedule a test drive from home.

To score the best prices and the best interest rates for financing, research could be a core focus for buyers. Check local dealerships to find the lowest prices or best deals on new models; buyers also could find that another brand’s model that’s similar to the one they prefer could offer a better price.

As interest rates rise, this also will increase the cost of the new car purchase. Buyers can choose to get pre-qualified for loans to help them find the best rates, terms and monthly payments for their budget. Getting pre-qualified for a loan doesn’t impact an individual’s credit; the process is designed to help buyers understand the loans for which they might qualify to help buyers better understand their options.

To shop smart in 2023, car buyers might focus more time on research related to the purchase. Once they find the vehicles that fit their price range and the loan that works for their budget, they can visit the dealership to complete the buying process.