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Car-Buying Gender Gap: Women Purchasing Vehicles Differently Than Men

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It turns out that car-buying preferences among gender go beyond color, as survey data showed that men are 57% more likely than women to buy a new car.

That data found that 28% of women are likely to purchase a new car, versus 44% of men. Conversely, women are 44% more likely than men to opt for a used car (39% versus 27%, respectively).

Priority and values seem to play a role in why fewer women than men buy new.

Priorities vs. values — and technology vs. practicality

Research from Cars.com found that safety features like automatic emergency braking are more popular with women than men. Meanwhile, more men than women are interested in newer, tech-focused features — such as smartwatch integration, Apple CarPlay and Android Auto.

The research also revealed that women are more practical in their car searches. When they’re not looking at common manufacturers like Chevrolet, Ford and Toyota, women are searching for Jeep, Hyundai and Kia. Men, meanwhile, veer toward aspiration and image, focusing on luxury manufacturers such as Mercedes-Benz, Lexus and Audi.

How down payment, credit score impact new vs. used decision

If you’re thinking of going the new car route for your next ride, here’s how buying a new car rather than a used one could impact your financial situation — and your credit at large.

Down payment

The average down payment for a new vehicle in 2020’s fourth quarter was $4,734, according to Edmunds. The average down payment for a used vehicle in the same quarter was $3,283. So if you’re thinking of getting a new car with added bells and whistles, you’ll generally be dishing out more for a down payment.

Though, there are obvious benefits to putting down a larger down payment — mainly paying less each month. In general, every $1,000 you offer upfront should lower your monthly payment by about $15 to $18.

A high down payment could spin several things in your favor. When you make a sizable down payment:

  • You’re not at risk of being underwater
  • You don’t have a reason to buy GAP insurance
  • You pay less in interest over the life of the loan
  • You could qualify for a lower APR with a more favorable loan-to-value (LTV) ratio

Two reasons you might not want to put more money down:

  • If you choose a 0% APR financing deal
  • If you could get an investment rate of return that is higher than your auto loan APR

Credit score

If you’re going to buy a new car, it’s more likely you’ll need to finance your purchase, which also means you’ll likely need a higher credit score.

According to the latest quarterly report from Experian, 81% of new cars require financing, versus 35% of used cars. Plus, the average credit score for new-car buyers was 733, compared with 671 for used-car buyers.

The higher your credit score, the less of a risk you seem to lenders. To make sure you get your best terms and offers when taking out a car loan, consider taking steps toward building a strong credit score. For context, a FICO Score of 670 or higher is typically considered “good.”

To improve your credit score, start by ordering a free credit report. Because of COVID-19, each of the three major consumer credit bureaus — Experian, TransUnion and Equifax — are offering free weekly credit reports through the end of April 2022. (You can typically order one for free once a year from each bureau.)

You’ll also want to:

  • Pay your bills on time
  • Keep your credit utilization rate low
  • Wait for items that have dinged your score to fall off your report
  • Monitor your progress

Whether you’re buying a new or used car, knowing how much you need to save — as well as how your credit impacts your financing options and how much you’ll be paying on the car — will help you make the best decision for your situation.

Methodology: LendingTree commissioned Qualtrics to conduct an online survey of 2,075 Americans, with the sample base proportioned to represent the overall population. Of the total sample size, 436 had bought a car at some point in 2020 and 237 had sold a car during the same time frame. The survey was fielded Nov. 6-11, 2020.

 

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