2023 Exotic & Luxury Used Car Market Update
What goes up must come down, and the used car market is no exception. Due to the pandemic, the value of used cars spiked to near-record levels in 2020 and 2021. A shortage of inventory, supply chain issues for critical technological components, and shutdowns across the globe meant consumers and dealerships had to work with what was already on the lot. Any orders placed for current-year models were put on hold until further notice.
That’s old news to most of us, even if we weren’t looking to purchase a car (new or used). Many of us will remember the empty dealer lots that meant anyone selling a used car probably got their money’s worth (or more) in those two years. It was a seller’s market just a few years ago, but times are changing as we wrap up the first quarter of 2023.
Present Automotive Market Conditions
Many automotive manufacturers have finally begun to recover from the fallout due to COVID. Orders left unfulfilled are now flowing in from domestic and international plants. This surge in the new car market signals a return to the normal flow of inventory, specifically within the relationship between the new and used segments.
The pandemic forced consumers to hold onto their vehicles for a longer period, including those who can purchase a new car every year or every couple of years. With new inventory finally hitting the lots this year, old models transition to the used market and contribute to a more robust supply. This dynamic exists in every segment of the automotive industry, most notably in the exotic and luxury market.
Exotic + Luxury Markets and EVs
Where mainstay dealers such as Ford, GM, and Toyota struggled in the face of the pandemic, the luxury car market thrived under the same conditions. Limited inventory, strong price points, and stiff competition characterize BMW, Ferrari, Lamborghini, Range Rover, and many other elite brands whether there’s a pandemic going on or not. After all, the main selling point luxury car dealers rely on stems from the exclusivity and corresponding prestige of most exotic vehicles.
Electric vehicles (EVs), though gaining popularity, find themselves in a similar position compared to exotics. The infrastructure necessary to support EVs across the nation continues to establish itself on a logistical basis. Even owning an EV, however, remains a distant thought for consumers who may find the dependence upon electricity too much of an umbilical cord. If you live in an apartment complex and can’t charge an EV or drive beyond the advertised range, this climate-friendly option is just as impractical for you as a six-figure Lamborghini SUV.
The Automotive Forecast for 2023
So what does all this mean for the exotic and luxury used car market? You might be asking yourself, “Should I sell my exotic car?”
Several factors now influence consumers at all price points in the automotive industry:
- With more new inventory available, models of years past will begin to enter the used car market in greater volume. More cars on the lot could translate to cooler used car prices in the face of larger nationwide availability.
- Rising interest rates force many consumers to weigh their options. Expensive leases fall in favor of simply purchasing a used vehicle outright to save more in the long run.
- It’s probable that the fulfillment of tax refund payments before May 1st will moderate the current retail demand. Meanwhile, some consumers may hesitate to make purchasing decisions due to the overall economic uncertainty, and the Federal Reserve’s actions to control inflation have also added to the instability in the market.
What This Means for the Exotic + Luxury Market
A variety of factors, such as the collapse of Silicon Valley Bank and overall economic uncertainty, are causing substantial shifts in the used vehicle market. As a consequence, dealers are encountering a market that is increasingly unpredictable and volatile without a clear idea as to when regular conditions will emerge.
With that all said, there are safe havens to turn to for reasonable guidance and expertise during this time of turbulence. We Buy Exotics specializes in luxury used automobiles and have kept a finger on the pulse of this volatile market to guide you when selling an exotic vehicle. Our high level of customer service and satisfaction is complemented by extensive knowledge of the industry and fair market values. Let us help you find the car of your dreams and avoid the nightmare. If you’re looking to sell your exotic vehicle, now is the time. Contact the experts at We Buy Exotics today.