As we drive into 2024 — and the uncertainty of an election year — it’s worth looking back at some of the major automotive news and trends of 2023 and how they’ll affect the coming year. Labor strikes by United Auto Workers members impacted not only working and manufacturing conditions, but also shoppers’ attitudes and intentions; electric vehicles appear to be coming into more of the mainstream while facing significant headwinds; and Gen Z is aging into car buyers. And for the umpteenth year in a row, consumers are cost-conscious when it comes to buying a new car, especially with the prospect of continued economic uncertainty.
Cars Commerce surveyed consumers to see how these trends and more are likely to have the most impact on car shopping in 2024.
The Price Is Important, But It Might Not Be Right
That car shoppers are cost-conscious isn’t necessarily a surprise, but the gulf between the average new-car price on Cars.com and consumer searches is. Even as new-car inventory numbers are up nearly 48% compared to the same time in 2022, prices have gone up, too — 1% year over year, pushing the average new-car price to more than $49,000. Meanwhile, the majority of consumers on Cars.com conduct their searches with a maximum list price of $30,000. Looming concerns about the potential for a recession 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 among consumers, followed closely by interest rates.
Used Cars Won’t Be the Same Affordable Alternative
The new-car shortage of years’ past is now impacting the market for late-model used cars, which means cost-conscious consumers won’t have as many affordable alternatives to new cars. The lack of new cars in the last one to three years means there are now not many used cars that are less than 3 years old, but that also means shoppers won’t have as many lower-cost, possibly otherwise-identical cars from which to choose.
That’s potentially good news for those who managed to snag new cars in the last few years, as trade-in values are strong; data from Accu-Trade, Cars Commerce’s trade and appraisal technology, shows an average trade-in value of roughly $26,500 for used vehicles that are 1 to 5 years old. Things are likely going to get worse in the used-car market before they get better, too, as owners may hold on to cars for longer rather than face higher new-car prices, and shoppers may actually find a newer, lower-priced vehicle a more readily available choice than a higher-end used car.
Car Dealers Better Have Some Rizz for Gen Z
Call them what you want: Gen Z, zoomers, TikTok Teens Who Are Actually in Their Mid-to-Late 20s, children (derogatory), the youngest generation of car buyers is ready to buy a car — and not always for the first time. Compared with other generations, more members of Gen Z purchased their first car between the ages of 16 and 18, and they prefer to buy in person, too; only baby boomers were more likely to prefer purchasing a vehicle in person.
Some tips for dealers: More than half of Gen Z is likely to consider an EV, and they value Apple CarPlay and Android Auto more than any other generation. Unfortunately for traditional dealers, zoomers are tied with millennials as those most likely to trust a tech company to build a car, and only 25% of Gen Z say they would finance through a dealership.
And for the small percentage of zoomers who say they own six or more cars: We just have some questions. (The average number of cars owned for Gen Z is 2.1, which isn’t a lot compared to boomers’ 4.7 average, but it still seems weird, right?)
UAW Strikes Affect Shoppers’ Attitudes
With new contracts between the UAW and Ford, GM and Stellantis now ratified, inventory impacts of affected models are likely to diminish as production resumes at affected plants. But the strikes brought manufacturing considerations to the forefront for many shoppers, as 29% of car shoppers are now considering vehicles made by UAW labor, while 11% are not (60% of consumers were not swayed in either direction). Moving into an election year, this is likely to continue to be a hotly debated topic — automakers are making more U.S. manufacturing investments, particularly around EV production; the UAW says it’s looking to expand membership; and the ripple effects of the concessions it won may impact nonunion manufacturing even if that labor force doesn’t officially join.
Among in-market shoppers, 42% say they’re more likely to consider an import brand, but it’s worth noting that doesn’t necessarily mean a car that isn’t made in America. Of the 12 most American-made cars according to our research, only four — Tesla’s Models Y, 3, X and S — are made by a domestic company, and none come from a traditional Big Three automaker.
Electrification Continues, Faces Potential Headwinds
A majority of shoppers, according to Cars Commerce survey data, are likely to at least consider a new EV when shopping, but that number has 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. Most manufacturers launching EVs have followed a strategy of releasing pricier, higher-margin and more feature-laden versions first in an effort to build hype and capture early adopters, but it seems that many of those early adopters have, well, adopted. It may be time to bring out the less expensive models we’ve been promised.
Charging infrastructure investment is improving, and many automakers are also adopting the North American Charging Standard, which would open up the more reliable Tesla Supercharging network to non-Tesla EVs. But will investments continue after the coming election? Will the federal EV tax credit change once again in either implementation or qualification — or both? Will the ability to apply the tax credit to the down payment, beginning Jan. 1, 2024, make consumers more likely to buy an EV? As with the other trends, car shoppers will provide some answers in 2024.
More From Cars.com:
- Here Are the 10 Cheapest New Cars You Can Buy Right Now
- What Are the Best Used Cars for $20,000?
- What to Know Before Purchasing an Electric Vehicle: A Buying Guide
- Inventory of UAW Strike-Affected Models Is Shrinking as Shopper Awareness Grows
- Find Your Next Car
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