How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

3 Auto Trends to Monitor as We Near the Halfway Point in 2023

lt-leaf-logo Why use LendingTree?
We are committed to providing accurate content that helps you make informed money decisions. Our partners have not commissioned or endorsed this content. Read our

Editorial Guidelines

At LendingTree, we are committed to providing accurate and actionable content that helps you make informed decisions about your money. Our team of writers and editors follows these key guidelines:
  • We thoroughly fact-check and review all content for accuracy. We aim to make corrections on any errors as soon as we are aware of them.
  • Our partners do not commission or endorse our content.
  • Our partners do not pay us to feature any specific product in our content, but we do feature some products and offers from companies that provide compensation to LendingTree. This may impact how and where offers appear on the site (such as the order).
  • We review and interview both external and internal reputable sources for our content and disclose sourcing in our content.

A car is a major purchase, so it makes sense that you might spend weeks or months figuring out your unique needs. After all, you need to determine whether you’re going with a new or used vehicle, how much money you’re willing to spend and what features are necessities and which are extras.

The state of the auto industry itself can also impact your experience. Unfortunately, you may be greeted by a lackluster buying environment if you plan on buying soon.

“Things don’t appear to be as bad as they were within the past two years when inventories vanished and prices skyrocketed,” says Matt Schulz, LendingTree chief credit analyst. “However, the combination of still-high prices and rising interest rates means it isn’t a spectacular time to go car shopping.”

Learn how current auto trends could impact you.

On this page

No. 1: New car prices are at an all-time high

If you’d prefer to buy a new car rather than a used one, be prepared for some sticker shock. Prices for new cars are at an all-time high, rising a whopping 21.7% between April 2020 and April 2023. Specifically, it jumped 5.4% in the past year between April 2022 and April 2023.

There’s a bit of a silver lining here though: Inventory for new cars appears to be bouncing back. And that seems to be translating into more sales. For example, Cox Automotive’s seasonally adjusted annual rate (SAAR) for new vehicle sales in April is expected to be almost 15.1 million, higher than the previous year’s 14.3 million.

For context, the previous drop in inventory was partially driven by the supply chain issues from production slowdowns during the beginning of the pandemic, as well as shortages of things like computer microchips. There was also a spike in sales in spring 2021 that further reduced dealership inventories.

Given the trend toward increasing new car inventories and sales, prices may start to dip in the coming months — but only time will tell the full impact.

No. 2: Used car prices may be coming down

Although new car prices generally went up steadily between April 2020 and April 2023, used car prices have had a different journey.

Prices for used cars and trucks have subsided somewhat compared to their peak in early 2022. Still, they’re nowhere near the pre-pandemic prices. For instance, April 2023 prices are 38.1% higher than in January 2020 — and 38.6% higher than in April 2020. So cost could still be a major concern if you’re looking to buy a used car soon.

At the same time, dealership inventory and sales of used cars and trucks have been declining. So you may have to buy your ideal used vehicle online or from a private seller. It might take longer than usual to find the perfect car or truck for you.

No. 3: Auto loan rates are high

If you’re planning on buying a car on credit, keep in mind that interest rates for car loans are the highest in the past 15 years. For context, here’s data — via Federal Reserve Economic Data (FRED) — that shows the average interest rate for a 48-month loan on a new vehicle.

Average interest rate for 48-month loans on new vehicles

February 2020February 2021February 2022February 2023

Source: Federal Reserve Economic Data (FRED)

Although these rates are high, car loans can still be useful for those who need them. Even if your credit score isn’t where you want it to be, you might still be able to find a better interest rate if you do your research.

“It’s important to understand that there may still be deals out there for folks willing to shop for them,” Schulz says. “Your best move is to shop around at sites like LendingTree or banks and credit unions. Try to get preapproved for a car loan before you set foot in a dealership.”

Those rates might be lower than you’ll find at a dealership, and you can then use them as a bargaining chip if and when you do visit a dealership.

That being said, when interest rates are this high, saving up for your car and paying in cash or taking out a smaller loan will probably be the best thing for your bank account in the long term. In the current environment, saving might take less time than you think.

Savings account yields are now the biggest they’ve been in years, with banks offering 4% returns or higher,” Schulz says. “That means that extra savings can grow more quickly than you might think.”

Recommended Reading