We love surveys, especially when they show that our long national nightmare of no new cars to buy just might be coming to an end.
A new survey reveals 89% of respondents plan to shop for a vehicle by the end of the year, according to Cars.com.
The online survey was conducted Nov. 11. The Cars.com research and insights team sent the survey to a nationally representative group who had been pre-screened as planning to buy a car this year. The survey received 922 responses.
For the last couple of years, new car inventory has been in short supply, leaving customers with few options if they needed a car immediately and couldn’t place a factory order. The situation has raised challenges for consumers, not the least of which has been dealer price markups ranging from rapacious to absurd.
Buying sight unseen
Cars.com reports inventory levels are beginning to catch up with demand. After almost three years of the pandemic and resulting shortages, Americans are more ready than ever before to get behind the wheel of their new vehicle. According to the survey, almost half (47%) of consumers are willing to purchase a car online without even seeing it first.
That speaks to the general uniform quality of new vehicles. A new vehicle is still a major purchase and multi-year commitment, yet consumers are confident the driving experience of any new vehicle will be within an acceptable window of performance and comfort. That leaves them free to select their new ride on factors like utility, features and curb appeal.
People know what they want
According to the Cars.com survey, more than half (51%) of potential buyers have already identified a short list of vehicles that interest them. Of those, 57% have identified the precise vehicle they want to buy or say that they are ready to buy.
That’s not very unusual, given that most people remain loyal to their favorite brand, and often to their favorite nameplate. This is one reason that automakers closely track “conquest” sales, where a customer chooses a vehicle from a new brand. From a dealer perspective, the buyer who has a clear idea of the car they want to buy represents an easy sale.
New or used — does it matter as much anymore?
Among the survey respondents, Cars.com reports 60% are planning on purchasing a brand new vehicle, and 59% say they’re purchasing this year in order to get a new or newer vehicle than they currently drive. In good news for used car inventory, 56% say that they plan to trade in a vehicle when purchasing a new one.
Through the inventory shortage, used vehicles have also been scarce as many buyers delayed purchasing their next car. Along with the shortage of new cars, that pushed used car prices to their highest levels ever recorded, often rivaling or exceeding the sticker price of a new car. One sign that the shortage is abating is that used car prices fell in September, and then continued downward in October of this year.
The survey also reported that 36% say that they are willing to consider a used car if it means they get their car sooner. Willingness to buy used and to pay top dollar for a used car is also related to the consistently high quality and longer service life of modern vehicles. Buying a three-year-old car today is not automatically signing up for repair bills, it’s simply purchasing the unused portion of a vehicle’s honeymoon period.
Have car? Will travel.
Cars.com also reports that consumers are ready to go the extra mile to get their vehicle sooner. According to the survey, 59% are willing to travel to another state to purchase a new or used vehicle, if it’s the one they want and it’s available to drive off the lot immediately.
That’s just a fact of life for new vehicle buyers today. Dealers may or may not be willing to trade and transport a vehicle from out of state, so flying or driving some distance may be the only option if the vehicle a consumer wants is sitting in a remote showroom.
The last item on the cars.com survey found that interest in alternative fuel vehicles is still on the rise. A record 44% of potential buyers are considering some form of alternative fuel vehicles, mostly hybrids, plug-in hybrids, and EVs. For the 52% of buyers who remain EV-hesitant, the price premium for going electric is the most-cited obstacle, rather than range anxiety. That has been true for a decade.
Automakers are rolling out marketing initiatives to help consumers understand how EVs can work for them. “EVs are for everyone,” is the message from a recent Chevrolet campaign.
“You see a lot more adoption (as a) high tide raises all boats,” he said. “As you see more (battery-electric vehicles) more people talk about EVs and that normalizes the EV lifestyle. As you see your neighbors and your friends with EVs, and see more charging stations, there’s more sensitivity,” said Chevy’s marketing chief Steve Majoros in September.
Overall, this survey points to hopeful signs: if interest rates remain steady and new car inventories grow in the new year, it could lead to dealers abandoning their markups in favor of sales volume and herald a booming new and used vehicle market in 2023.