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Car Purchasing Process - US - July 2019

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Why is car buying the worst?
How to make car purchasing less unpleasant
Traditional dealers need to evolve their vehicle purchasing experience
Online auto retailers need to build upon their creative marketing solutions
What auto retailers and auto brands need to know
Consumers are becoming more accustomed to disruption
Consumers demand transparency to build loyalty and trust
What’s next for car purchasing?
Dealership sales staff should be repositioned as brand advocates
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Disposable personal income shows signs of slight growth
Consumer confidence provides opportunity to boost sales
Used sales still make up the majority of the market
MARKET SIZE AND FORECAST
Historic and projected sales performance of total US auto sales
Figure 1: Total US sales and fan chart forecast of new and used light vehicles, 2011-21
Figure 2: Total US unit sales and forecast of new and used light vehicles, 2014-24
Used vehicle sales account for 70% of total vehicle sales
Figure 3: Total US unit sales of new and used light vehicles, by segment, 2017 and 2019
VEHICLE SALES BY BRAND
US vehicle sales by volume are down calendar year to date
Figure 4: Sales of Market, by company, 2019 calendar year to date
MARKET FACTORS 
Gas price increases are likely to affect purchasing
Figure 5: Monthly US all-grade gas prices, January 2007-April 2019
Consumer confidence high for now, but expected to drop
Figure 6: Consumer Sentiment Index, January 2007-May 2019
Disposable personal income shows signs of slight growth
Figure 7: Disposable Personal Income, January 2007-May 2019
KEY PLAYERS – WHAT YOU NEED TO KNOW
Automakers explore in-house insurance offerings for consumers
SUV market growing increasingly overcrowded
UK direct-to-consumer vehicle start-ups draw inspiration from Amazon
WHAT’S HAPPENING
Automakers are not so subtly making a move for the insurance industry
How one travel subscription company could help the future of vehicle subscriptions
WHAT’S STRUGGLING
Oversaturated SUV market expected to outpace consumer demand by 2023
WHAT’S NEXT
Crypto currency could become viable payment option for vehicle purchase
UK start-ups aim to bring Amazon-style business model to used car sales
TRENDS AFFECTING THE CAR PURCHASING PROCESS
Car buyers are looking for more personalization in their retail experience
Figure 8: Volkswagen T-Cross, “I Am More Than One Thing” commercial, April 2019
Consumers seek an elevated in-store and online experience
Brands provide shortcuts to aid consumer decision making
THE CONSUMER – WHAT YOU NEED TO KNOW 
Consumers find dealership experience unenjoyable
Paying off student debt frees up money to buy a vehicle
Consumers are open to vehicle purchases from Amazon
Most Millennials don’t have a set vehicle purchase price
LIFE EVENTS PROMPTING CAR PURCHASING
Expectant parents are looking to buy
Figure 9: Purchase intent of expectant parents, June 2019
Most recent college graduates plan to purchase a car within the next year
Figure 10: Purchase intent of future college graduates, June 2019
Paying off student debt frees up money to buy a vehicle
Figure 11: Purchase intent of future student-debt-free consumers, June 2019
Future homebuyers will delay a vehicle purchase
Figure 12: Purchase intent of future property owners, June 2019
CAR PURCHASING PROCESS OVERVIEW
Over half of consumers show long-term purchase intent
Figure 13: Purchase intent of total population, June 2019
Majority of consumers intend to buy a new vehicle for their next purchase
Figure 14: Vehicle type purchase consideration, June 2019
Consumers most concerned with vehicle performance and cost in pre-purchase research
Figure 15: Top vehicle research topics, June 2019
Figure 16: Top vehicle research topics, June 2019
When looking at car performance, fuel efficiency is most researched
Figure 17: Car performance research topics, June 2019
Consumers research competitive pricing in fear of overpaying
Figure 18: Vehicle financing research topics, June 2019
More than two thirds of Millennials don’t have a set purchase price for their next vehicle
Figure 19: Likelihood to have a set auto budget, by generation, June 2019
Figure 20: Cars.com vehicle matchmaker quiz, June 2019
Half of consumers don’t like to negotiate
Figure 21: Attitudes toward price negotiations, June 2019
THE FUTURE OF THE CAR PURCHASING PROCESS
Younger consumers believe dealerships will cease to exist
Figure 22: Likelihood of local dealerships no longer existing, June 2019
As with retail, younger consumers are attracted to direct-to-consumer model
Figure 23: Likelihood of buying directly through an automaker, by generation, June 2019
Consumers believe no-haggle pricing will become normalized
Figure 24: Likelihood of no-haggle pricing, June 2019
Men see a future in buying directly from Amazon
Figure 25: Likelihood of buying through Amazon, by age and gender, June 2019
Consumers see a future with vehicle home delivery
Figure 26: Likelihood of vehicle home delivery, by geographic area, June 2019
A third of consumers see a future of purchasing a vehicle on Instagram
Figure 27: Likelihood of buying a vehicle on Instagram, June 2019
Figure 28: Consumer attitude toward vehicle purchases on social media, June 2019
ATTITUDES TOWARD CAR DEALERSHIPS
Consumers find visiting dealerships unenjoyable, for now
Figure 29: Consumer enjoyment of dealership visits, June 2019
Half of consumers view car salespeople as untrustworthy
Figure 30: Consumer attitudes toward car salespeople, June 2019
Half of consumers plan to visit multiple dealerships
Figure 31: Dealership visits as a vehicle research method, June 2019
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations

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