Should I buy a new car in 2023? A car market update

If you were looking to buy a car in 2022, you might have noticed one key trend above everything else: there just weren’t enough cars.

From shortages in key components used to manufacture cars to labour force shutdowns, Australia was still struggling to catch up with the demand that had built up over several years of pandemic. 

Now that you’re establishing new financial goals for the new year, you might have found yourself wondering if now is finally the time you get yourself that sweet new ride. We spoke to Mike Sinclair, editor-in-chief at Carsales, to get some insight on the shifting nature of the car market in 2023.

Will it be easier to get a new car this year?

If you were hoping to find cars lined up and ready to go, you might need to level your expectations. 

Sinclair says that things are looking up, but it’s not going to be a fast process. “Supply will continue to normalise,” he says, reflecting on the changes we’re already starting to see in the car market. In fact, some brands are seeing good supply coming into Australia, specifically with certain models (Sinclair cites the Hyundai Tucson and Sante Fe, for example). 

Other models are seeing the run-on effects of the several years of short supply. Waitlists are already closed or close to closing for certain models (for example, Hyundai’s i20n and i30), with manufacturers concerned about their ability to fulfil orders. 

There are certain types of cars that might be even more difficult to come across, like electric vehicles. These are “... in short supply for a number of reasons, particularly the fact that there are not the incentives in this market, so the manufacturers don’t send the cars here.” While growing incentives are available for consumers, EV supply will continue to trickle through until manufacturers are similarly incentivised.

Have there been any other changes to the car market?

It seems like everything else is staying pretty consistent with cars, including the competitive nature of second-hand car sales. 

“As long as new car supply is abbreviated, good used cars will remain in high demand,” assures Sinclair, though this is also impacted by rising inflation. All things considered, there has been a levelling off in the prices of second-hand cars. As new car supply increases, these used car prices should continue to normalise.

Other trends in the market remain consistent. Aussies continue to love SUVs and utes, looking for durable vehicles to tackle all terrains. Electric vehicle uptake is increasing quickly, though it remains a tiny fraction of the overall market (under 3.5% of new vehicle purchases Australia-wide as of the end of 2022).

Sinclair notes that usually times of growing economic stress see a drop off in people looking for other kinds of vehicles, like boats and motorbikes, but that right now is an interesting exception. Perhaps the low car supply is pushing that demand elsewhere, or perhaps people are just getting more adventurous - either way, it could be the year to try something new.

If you are looking for a car in 2023, check out the Mozo People’s Choice Award Winners for best car brands - and then get set up with the best car loans!