Cars.com releases its “2024 Automotive Trends” report suggesting dealers stock as much inventory costing $30,000 or less as possible and that while EVs may not be every shopper’s choice, they are still in demand for some segments of the buying population.
“Throughout 2023, the global auto industry, domestically and abroad, faced uncertainty, including a history-making OEM labor strike. Consumers are feeling the impact of broad economic and political forces, especially in their wallets,” says Rebecca Lindland, senior director of industry data and insights at Cars Commerce, the parent company of Cars.com.
“As we head into the new year, consumers – regardless of generation or geography – seek affordable solutions to get the vehicle they want with the features they value.”
Cars Commerce conducted a handful of surveys between May and October 2023 and detected five trends that can help dealers sell more cars this year. They are as follows:
1. The Price Needs to Be Right
Most searches on Cars.com are for vehicles with a maximum listing price of $30,000, while the average new-car price tops $49,000. Recession concerns and high interest rates “have seen an increase in consumers who say they’re waiting to make a large purchase, and total price remains the most significant financial consideration,” says Cars.com
2. Buying a Used Car Isn’t Necessarily an Affordable Alternative
Used-car prices, while down from last year’s highs, are still expensive due to sparse inventory. Manufacturers produced fewer cars during COVID, creating a 10.2-million-unit deficit of “gently used” one- to three-year-old vehicles, reports Cars.com. The good news is that this used-car shortage has kept trade-in values high. They are down from their pandemic peak “but are still elevated nearly 23% from 2020 levels,” according to Cars.com. Data from Accu-Trade, Cars Commerce’s trade and appraisal platform, shows the average trade-in value for one- to five-year-old used vehicles is about $26,500.
3. Gen Z Buys Cars Early and in Person
Gen Z – those born between 1997 and 2012 – are buying their first set of wheels between the ages of 16 and 18. “This rush to buy young isn’t just about style; it signals a fresh wave of enthusiasm for personal car ownership among the youth,” Cars.com reports. Gen Z also prefers to buy in person, with only 9% saying they like to purchase online. In comparison, among millennials – those born between 1981 and 1996 – 16% prefer to purchase their car fully online, according to Cars.com.
Dealers can up their appeal to Gen Z shoppers by better marketing their EV selection, as more than half of Gen Z shoppers are likely to consider an EV, says Cars.com. They also value Apple CarPlay and Android Auto more than any other generation. On the downside, equal numbers of Gen Z and millennials say they are most likely to trust a tech company to build a car. Gen Z also are loath to finance through a dealership, with only 25% saying they would do so.
4. American Consumers Are Willing to Pay More for U.S.-Made Vehicles
Cars.com asked a general audience whether they would pay extra for a vehicle that creates U.S. jobs, and nearly half said they would. That doesn’t necessarily mean a U.S. brand, however. On Cars.com’s list of the 12 most American-made cars, the top four are Tesla models. The remainder are foreign-owned brands manufacturing vehicles in the U.S., including Honda, Volkswagen and Toyota. Cars.com’s survey finds that 42% of in-market shoppers are more likely to consider a foreign nameplate.
5. Consumers Are Interested in EVs But Want Affordable Options. Hybrids May Be the Answer.
Over half of Americans see EVs “ruling the roads in less than 20 years,” Cars.com reports. Searches for EVs made up 4% of searches, up 0.06 of a percentage point year-on-year. Meanwhile, searches for hybrid and plug-in hybrid vehicles doubled to 8%, up 2.5 percentage points on year. A majority of shoppers are likely to at least consider an EV when shopping. But that number declined to 64% in October from 70% in March. “Among those not considering an EV, vehicle cost was the primary factor, followed by a lack of charging infrastructure,” Cars.com says.
More automakers are adopting Tesla’s North American Charging Standard, thus giving more drivers access to Tesla’s nationwide charging network. And the federal EV tax credit can now be applied at the point of purchase, though fewer vehicles qualify. Will that make consumers more likely to buy an EV? “Car shoppers will provide some answers in 2024,” reports Cars.com.
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