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Car Shopping Amid Pandemic Fueled More by Want Than Need
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The coronavirus pandemic has changed how Americans spend, and those behaviors have had an impact on the car-buying decision process.
The 11th annual Car Buyer Journey Survey from Atlanta-based Cox Automotive found that car buyers in 2020 were more driven by “want” than “need.” Consumers were more likely to be lured into buying a car by attractive offers.
Further, 57% of vehicle shoppers considered both new and used cars in 2020, a slight rise from 53% in 2019. Here’s what else the survey uncovered.
Budget-conscious shoppers were less likely to buy a new car in 2020
More turned away from new vehicles when buying a new set of wheels in 2020 compared with the previous year.
According to the survey, buyers in 2020, on average, were 50 years old, with an income above $75,000. But only 30% of new-car buyers had an income above $75,000, which was a 3% drop from 2019 and an indication that lower-income buyers were more budget-conscious.
Meanwhile, a higher percentage (45%) of used-car buyers in 2020 had an income below $75,000.
Technology boosted used car-buying process amid pandemic
Automotive dealers, such as AutoNation and CarMax, have expanded their used-car inventory amid the coronavirus crisis, while online car-buying platforms like Carvana cut out the middleman.
So it’s no surprise, according to the Cox Automotive survey, that used-car buyers in 2020 spent nearly three hours less shopping online than in 2019. Breaking that down, used-car buyers spent seven hours and 44 minutes shopping online in 2020, compared with 10 hours and 25 minutes in 2019.
A few things could explain why buyers spent less time online:
- They had a good idea of what they wanted before starting the car-hunting process
- They found an attractive deal
- They were contacted by a dealer with an attractive offer
Used-car buying sparked more by ‘need’ in 2020, but ‘want’ still played a role
The survey discovered some marked differences among those who bought a new car and those who bought a used one. Those who bought a used car did more so out of necessity, while those who bought new were more motivated by desire. (The types of buyers aligned at times, too.)
Purchase triggers for those who bought used:
- They had a damaged vehicle
- They had a unreliable vehicle or one in dire need of repairs
- They had a high-mileage vehicle
- They wanted a different type of vehicle
- They sought different features from a vehicle
Purchase triggers for those who bought new included:
- They sought different features from a vehicle
- They wanted or needed a different type of vehicle
- They were attracted by a promotion
- They had a high-mileage vehicle
- They had an expiring lease
Besides shopping online during the pandemic to save time, would-be car buyers can do a few things to save on the cost of purchasing a vehicle.
Those who might make less money, are budget-conscious or would like to go the used-car route out of necessity can look for ways to boost their credit. If they’re younger and have a thin credit file, they can consider reporting alternative data, such as rental history, to improve their credit score.
This move alone could help net them more favorable terms. To save on the cost of an auto loan, would-be buyers can try to lower their typical expenses to offer more cash as a down payment.
Methodology: Cox Automotive surveyed 3,061 consumers who bought a car between mid-March and September 2020 and used the internet during the process. The survey was conducted from Sept. 10 to Sept. 22, 2020.