Buying a car, new or used, is a major purchase for most Americans. Most shoppers spend the majority of the car buying process researching car prices, looking at car listings and comparing models. With so many factors to consider, buying a car is a very personal decision.
As a follow-up to last year's report, we wanted to find out more about the car shopping decision-making process. We surveyed 1500 car shoppers on everything from their reason for car shopping to how they plan to pay for their next car and what they plan to do with their current car.
More than 2 in 5 (44%) are shopping this year because they are ready for an upgrade. Nearly 1 in 5 (17%) are shopping because their current car needs repairs or their driving needs have changed, while 16% of shoppers are looking because they don’t currently have a car. Less than 6% of shoppers are looking due to an ending lease.
According to a report from Edmunds, the demand for affordable vehicles is growing and more car shoppers are turning to older, high-mileage cars. Our findings confirm this, shoppers are split nearly down the middle on new car vs. used car purchases, with more young adults planning to buy used, while older adults are seeking new cars.
Nearly a quarter (23%) of shoppers indicated a car that fits their lifestyle is the most important factor in their car selection process, whether that means a car that fits their family size or hobbies. Secondary considerations include price and condition of the car (18%), gas mileage (11%), vehicle history and features such as navigation or 4WD (10%).
Nearly 3 in 5 (58%) of car shoppers are planning to spend less than $20k on their next car, with 7 in 10 (71%) of used car buyers planning to spend less than $10k. A majority (57%) of new car shoppers' budget is between $20k and $40k.
While a majority (72%) want to shop locally and are only willing to travel up to 100 miles, more than a quarter (28%) are willing to travel more than 100 miles.
While a third of shoppers (32%) plan to shop exclusively at the dealership, 1 in 5 (20%) are exclusively shopping online and more than 2 in 5 (45%) are open to either online or dealership shopping. According to a recent study from Autotrader and Kelley Blue Book, a majority of the time spent shopping for a car is spent researching and browsing online, so it makes sense that many users are planning to do at least some shopping online.
While more than 2 in 5 shoppers plan to trade-in their current cars, nearly 1 in 3 (28%) plan to sell their car privately, 1 in 5 (20%) plan to gift the car to a friend or family member and 5% plan to donate the car to charity.
Overall more than half (60%) of car shoppers plan to finance their next purchase, however those seeking a new car and are older shoppers are more likely to use financing than younger shoppers looking for used cars. It may be that young adults are likely to be paying cash for their next car do to lack of credit and limited budgets.
More than a quarter (28%) of car shoppers looking to finance their next car don’t know their credit score, with younger shoppers being slightly less likely to know their credit score than older shoppers.
Overwhelmingly, shoppers plan to make a down payment (91%). Most shoppers (65%) plan to make a down payment of less than $4k.
More than half (55%) of shoppers indicated lower monthly payments as more important to them than interest rate on their car loan.
We surveyed 1500 Americans planning to purchase a car in the next year via the survey platform Pollfish. The survey was conducted Jan. 8, 2018.
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Brionna is on a roller coaster that only goes up. You can follow her on twitter @BrionnaLewis.