New Car Buying Trends
by Stephanie Hart
A new year brings new challenges for car shoppers and dealers alike. As many of us know, the auto industry has been turned upside down during the last few years. And whether you believe these changes are positive or negative, information is power. “FYI” reporter Stephanie Hart breaks down the latest in car buying trends.
STEPHANIE HART: High interest rates, supply chain problems and fears of a recession were some of the big challenges for the automotive industry in the last few years.
The post pandemic shakedown forced the auto industry and consumers to adapt, sparking new car buying habits.
My research for this FYI report led me to Jones Junction multi-franchise dealership in Bel Air, Maryland. It’s a True Car certified dealer for new and used cars. As you may know, TrueCar is an automotive digital marketplace that connects auto buyers and sellers to a nationwide network of preferred dealers.
Recently, TrueCar released its Automotive Shopper Trends Report. It reveals car shoppers’ actions and expectations during 2022. The findings are pretty interesting.
Brand loyalty has been on a downward trend for the last couple of years mainly due to the supply shortage. As a result, today’s car shoppers are more open-minded than ever before. After all, they have to be! They’re flexible when it comes to things like budgets, features and buying a new or used car.
The study shows 20% of TrueCar shoppers who originally intended to buy a new vehicle ended up purchasing a used one, but the reasons aren’t entirely due to inventory constraints.
TrueCar asked customers to rank, in order of importance, what they’re looking for in a used or new car. Coming in at number one: reliability; number two: fuel efficiency; and number three: engine. The rating was consistent across all buyer segments-- including luxury and non-luxury vehicles.
EV’s like this one continue to shake up the car buying market. During the first half of 2022 TrueCar reported a 120% increase year over year for EV prospects and a 25% year over year jump for hybrids.
Record-high gas prices during the Summer of 2022 had a lot to do with it. The study shows more than half of consumers say they are “somewhat” or “very likely” to consider an EV for their next vehicle.
BRYAN KILBY: It’s a big question of the support of it, right, and the infrastructure of electric. A couple of our brands-- they have electric, hybrid, gas, so it’s the little of the best of both worlds and I think that car is in strong demand. You know, they run 30-to-50 miles on a plug. Plug in, and then they switch over to gas and hybrid technology and I think that’s the really big deal.
STEPHANIE HART: Sentiments in sync with statistics, showing car shoppers are more practical nowadays, opting for features related to performance rather than appearance. Still, they don’t always like the process.
BOB FOUNTAIN: Shopping for a car is a real experience, you know. I hate when the guy goes back and says ‘Oh I got to see my sales manager.’ A lot of times you know what it’s gonna be and that’s it. You know going in.
STEPHANIE HART: The in-person sale’s process, and time, are two of the reasons more people are buying automobiles online. The study shows 62% of buyers want to be able to complete as much of the purchasing process online, which appears to be a win-win for everyone since it saves dealers time and money. And, saving money remains a big deal for consumers too.
BRYAN KILBY: I see the manufacturers increasing their incentives. They’re making the financing a little more reasonable with interest rates on new cars. And then the certified pre- owned business, you’ll see a very competitive interest rate on certified pre-owned. So, I think the consumer all in all is going to get a good deal on a car now because they-- we need to keep these cars selling, of course the manufacturers-- that’s how they keep the doors open so to speak.
STEPHANIE HART: So, will these post-pandemic car buying trends forever change how we buy and lease a car? That remains to be seen. But we do know 2023 will be a year of transition, as car shoppers and the auto industry navigate an evolving landscape with growth on the horizon.