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Car Purchasing Process - US - May 2017

Published By :

Mintel

Published Date : May 2017

Category :

Automotive Aftermarket

No. of Pages : N/A

Purchasing a car is an extremely important decision for most Americans, as it is typically the second most expensive purchase consumers make after their homes. The automotive marketplace is filled with options for consumers to consider: which brand, body style, specific model, new or used, all at an affordable price point for the buyer. Consumers navigate these factors throughout their purchasing process. Retailers and brands will need to reach consumers with content relevant to the stage shoppers are in to keep their vehicles in consideration at the point of purchase.

Table of Content

OVERVIEW
What you need to know
Definition

EXECUTIVE SUMMARY
The issues
Car buying is a stressful process according to most car shoppers
Figure 1: Attitudes toward car purchasing – Buying a car is stressful, by gender, March 2017
Many are worried they will overpay for their next vehicle
Figure 2: Attitudes toward car purchasing – Price, by age, March 2017
Multiple shopping resources used in purchase process
Figure 3: Shopping resources, March 2017
The opportunities
Shoppers know the body style, but not the brand of their next vehicle
Figure 4: Pre-purchase decisions, March 2017
Third-party site users cross-shop multiple platforms
Figure 5: Shopping resources, by third-party sites, March 2017
Younger shoppers open to alternative buying processes
Figure 6: Attitudes toward car purchasing, by age, March 2017
What it means

THE MARKET – WHAT YOU NEED TO KNOW
New vehicle sales look stagnant for 2017
Larger vehicles continue to sell
Off-lease vehicles flood used car market
Low gas prices expected to stay low

MARKET SIZE AND FORECAST
Overall automotive market plateaus before forecasted growth
Figure 7: Total US unit sales and fan chart forecast of new and used light vehicles, 2011-21
Figure 8: Total US unit sales and forecast of new and used light vehicles, 2011-21

MARKET BREAKDOWN
Consumer preference shifts from light cars to light trucks
Used car market will continue to grow
Figure 9: Total U.S. unit sales and forecast of new and used light vehicles, by segment, 2011-21
Figure 10: Total U.S. unit sales of new and used light vehicles, by segment, 2014 and 2016

MARKET FACTORS
Federal Reserve interest rate hike could slow sales
Average national gas prices remain below $2.50
Figure 11: US gasoline and diesel retail prices, January 2007-April 2017
Consumer confidence remains high
Figure 12: Consumer Sentiment Index, January 2007-March 2017
Age of vehicles on the road
Figure 13: Average age of vehicles, 1996-2016
Used car market will face influx of off-lease vehicles

KEY PLAYERS – WHAT YOU NEED TO KNOW
Carvana planning to go public
Beepi shutters operations
Tesla challenging long-established franchise dealer sales model

WHAT’S WORKING?
CarMax’s sales process attractive to used car shoppers
Third-party advertising sites provide a neutral platform for consumers
Carvana applies for initial public offering

WHAT’S STRUGGLING?
Beepi shutters operations
Kelley Blue Book’s email marketing
Figure 14: Third-party advertising email marketing competitive landscape, January 2016-December 2016
Figure 15: Third-party advertising email marketing inbox rate, read rate, and volume, January 2016-December 2016

WHAT’S NEXT?
Tesla challenges the franchise dealership model
Start-ups continue quest to sell cars online

THE CONSUMER – WHAT YOU NEED TO KNOW
English speaking Millennial Hispanics show highest purchase intent
Shoppers know what body style, but not the brand of their next vehicle
More car shoppers classified as Adversarial Shoppers

PURCHASE INTENT
Nearly three in 10 consumers plan to buy within the year
Figure 16: Purchase intent, March 2017
Purchase intent trending down
Figure 17: Purchase intent, July 2016-March 2017
Two in 10 consumers younger than 35 plan to buy within six months
Figure 18: Purchase intent, by age, March 2017
Millennial Hispanics show high intent in near future
Figure 19: Purchase intent, by Hispanic origin and generation, March 2017

TRADE-IN INTENT
Half of buyers with a vehicle in the household intend to trade in
Figure 20: Trade-in intent, March 2017
Six in 10 fathers considering a trade-in
Figure 21: Trade-in intent, by gender and parental status, March 2017

TYPE OF PURCHASE
Majority of consumers remain aspirational for their next vehicle
Figure 22: Purchase type, March 2017
Age and income are main factors in purchase type
Figure 23: Purchase type, by age and household income, March 2017

PRE-PURCHASE DECISIONS
Car shoppers likely to buy from a dealer and know the body style
Figure 24: Pre-purchase decisions, March 2017
As purchase nears, brand preference comes to mind
Figure 25: Pre-purchase decisions, by purchase intent, March 2017
Men are likely to be sole decision maker for the next vehicle purchase
Figure 26: Pre-purchase decisions, by gender and relationship status, March 2017
Figure 27: Volkswagen 2017 Spring Three And Easy Event | "Coffee", March 2017

PURCHASE REASONS
Desire for a newer vehicle tops reasons for purchase
Figure 28: Purchase reasons, March 2017
Younger car shoppers want a vehicle that is more fun to drive
Figure 29: Purchase reasons, by age, March 2017
Parents need a larger vehicle for the kids
Figure 30: Purchase reasons, by parental status, March 2017

RESEARCH TOPICS
Car performance features tops research topics
Figure 31: Research topics, March 2017
Figure 32: Research topics, by nets, March 2017
CPO shoppers do more research
Figure 33: Research topics, by purchase type, March 2017
Women more likely than men to research safety features
Figure 34: Research topics, by gender, March 2017
Research topics – TURF analysis
Figure 35: TURF Analysis – Vehicle research, March 2017

SHOPPING RESOURCES
Most shoppers are using or plan to use a dealer or manufacturer’s site
Figure 36: Shopping resources, March 2017
Online buying sites used exclusively by younger consumers
Figure 37: Shopping resources, by age, March 2017
Third-party site users cross-shop multiple sites
Figure 38: Shopping resources, by third-party sites, March 2017
Cars.com and KBB top third-party sites for English-speaking Hispanics
Figure 39: Shopping resources, by Hispanic origin, March 2017
Shopping resources – Correspondence analysis
Figure 40: Correspondence analysis – Shopping resources, March 2017

RESEARCH METHODS
Test-driving is the top method for researching
Figure 41: Research methods, March 2017
More consumers use an app or watch online videos closer to purchase
Figure 42: Research methods, by purchase intent, March 2017
Consumer reviews top professional reviews

ATTITUDES TOWARD CAR PURCHASING
Nearly eight in 10 consumers will consider maintenance costs
Figure 43: Attitudes toward car purchasing, March 2017
Millennials don’t trust car salespeople
Figure 44: Attitudes toward car purchasing, by generation, March 2017
Younger car shoppers regardless of gender worry about overpaying
Figure 45: Attitudes towards car purchasing, by gender and age, March 2017

CAR PURCHASING PROCESS CLUSTER ANALYSIS
Car shoppers classified into three different segments
Figure 46: Car purchasing process segments, March 2017
Adversarial Shoppers
Characteristics
Opportunities
Figure 47: Profile of Adversarial Shoppers, March 2017
Empowered Shoppers
Characteristics
Opportunities
Figure 48: Profile of Empowered Shoppers, March 2017
Unconventional Shoppers
Characteristics
Opportunities
Figure 49: Profile of Unconventional Shoppers, March 2017

APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms
Methodology – TURF analysis
Methodology – Correspondence analysis

APPENDIX – THE MARKET
Figure 50: Total US unit sales of total used light vehicles and CPO light vehicles, 2011-16

List of Table

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