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Car Purchasing Process - US - April 2016

Over 55 million new and used vehicles were sold in 2015 and many consumers are still eager to buy in the coming year. Yet the landscape is shifting, and the consumer attitudes that led to strong sales over the past five years are unlikely to be repeated. Two main market drivers, pent-up demand/vehicle replacement and desire for fuel efficiency, are less important to consumers in the current market. New vehicles with features based on innovative technology are most likely to attract the next generation of buyers.

This report examines the following issues:

  • Car sales continue strength and reach prerecession levels
  • Replacement of old vehicle drives demand but trend is waning
  • Falling gas prices alter car buying demands

Readers of this Report will learn how consumers view the car purchasing process and the major factors that influence their decisions to buy a car. New opportunities and marketing strategies are covered with a focus on consumer attitudes and potential for new demand. Attitudes based on demographics are explored in detail to show how marketers might best position services to specific segments of the market.

Types of vehicles referenced in this Report include the following: all cars, station wagons, sedans, pickup trucks, vans, minivans, crossover utility vehicles, and sport utility vehicles (SUVs).

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Car sales continue strength and reach prerecession levels
            • Figure 1: Total US sales and fan chart forecast of market, at current prices, 2010-20
          • Replacement of old vehicle drives demand but trend is waning
            • Figure 2: Average age of passenger cars and light trucks, 2002-15
          • Falling gas prices alter car buying demands
            • Figure 3: All grades all formulations retail gasoline prices, dollars per gallon, 2000-16
          • The opportunities
            • Over one third plan to purchase soon
              • Figure 4: Future purchasing plans, all, December 2016
            • Technology shaping new demand for vehicles
              • Figure 5: Purchase reasons, all, December 2014 versus 2015
            • Large vehicles making a strong comeback
              • Figure 6: Dodge Ram online ad, 2015
              • Figure 7: Type of vehicle for next purchase, by age, December 2014 versus December 2015
            • What it means
            • The Market – What You Need to Know

              • Car sales remain strong and reaching prerecession levels
                • Used cars command higher share of market
                  • Vehicle age remains at record high, with possible signs of reversing
                    • Ongoing economic strength bodes well for car sales
                      • Falling gas prices shifts landscape
                        • Technology playing key role in the car buying process
                          • Vehicle financing rates incredibly low, for now
                          • Market Size and Forecast

                            • Car sales remain strong and reaching prerecession levels
                              • Figure 8: Total US unit sales of new and used light vehicles, 2010-15
                            • New cars drive growth while used car sales are flat
                              • Figure 9: Total US unit sales of new and used light vehicles, by segment, 2010 and 2015
                            • Used cars command higher share of market despite new car expansion
                              • Figure 10: Total US unit sales of new and used light vehicles, by segment, 2010 (inner ring) versus 2015 (outer ring)
                            • Market will conservatively grow in the upcoming years
                              • Figure 11: Total US sales and fan chart forecast of market, at current prices, 2010-20
                            • Fan chart forecast methodology
                            • Market Factors

                              • Vehicle age remains at record high with possible signs of reversing
                                  • Figure 12: Average age of passenger cars and light trucks, 2002-14
                                • Ongoing economic strength bodes well for car sales
                                  • Figure 13: Personal income, 2002-15
                                • Falling gas prices alter car buying demands
                                  • Figure 14: All grades all formulations retail gasoline prices, dollars per gallon, 2000-16
                                • Technology playing key role in research and soon will in purchasing process
                                  • Vehicle financing rates incredibly low, for now
                                    • Figure 15: Effective federal funds rate, 1990-2015
                                • Key Players – What You Need to Know

                                  • Technology shaping demand and buying process
                                    • Hybrids face challenge as gas prices plummet
                                      • Online services will streamline process
                                      • What’s Working?

                                        • Technology shaping demand and buying process
                                          • Figure 16: Purchase reasons, all, December 2014 versus 2015
                                        • Technology raises consumer confidence during buying process
                                          • Figure 17: TrueCar online ad, 2015
                                      • What’s Struggling?

                                        • Hybrids face challenge as gas prices plummet
                                            • Figure 18: US unit sales and forecast of hybrid and plug-in vehicles, 2010-20
                                            • Figure 19: Tesla email ad, 2015
                                        • What’s Next?

                                          • Online services could streamline car buying process
                                          • The Consumer – What You Need to Know

                                            • Over one third plan to purchase very soon
                                              • Many seek a vehicle with new and better technology
                                                • Consumers waiting until vehicles break down
                                                  • In-person element remains crucial in car purchasing process
                                                    • Women now more involved in car buying process
                                                      • Large vehicles making a strong comeback
                                                      • Future Purchasing Plans

                                                        • Over one third plan to purchase very soon
                                                          • Figure 20: Future purchasing plans, all, December 2016
                                                        • Men more likely to be planning near-term purchase
                                                          • Figure 21: Future purchasing plans, by gender, December 2016
                                                        • Younger, more affluent consumers are near-term buyers
                                                          • Figure 22: Future purchasing plans, by age and household income, December 2016
                                                        • Parents are in the market for a car
                                                          • Figure 23: Future purchasing plans, by presence of children, December 2016
                                                        • Hispanics most likely to purchase in next year
                                                          • Figure 24: Future purchasing plans, by race/Hispanic origin, December 2016
                                                      • Purchase Reasons

                                                        • Many seek a vehicle with new and better technology
                                                          • Figure 25: Purchase reasons, all, December 2014 versus 2015
                                                        • Near-term buyers want additional car, new financing
                                                          • Figure 26: Purchase reasons, plan on buying a car in next three years, December 2015
                                                        • Technology critical for younger male consumers
                                                          • Figure 27: Purchase reasons, by gender and age, December 2015
                                                        • Desire for technology increases with income
                                                          • Figure 28: Purchase reasons, by household income, December 2015
                                                        • Hispanics buying because they need additional vehicle and financing
                                                          • Figure 29: Purchase reasons, by race/Hispanic origin, December 2015
                                                      • Reasons for not Purchasing

                                                        • Consumers waiting until vehicles break down
                                                          • Figure 30: Reasons for not purchasing, all, December 2014 versus December 2015
                                                        • Those aged 45-54 driving older cars, waiting to buy
                                                          • Figure 31: Reasons for not purchasing, by age, December 2015
                                                        • Opportunity for leasing to Black consumers
                                                          • Figure 32: Reasons for not purchasing, by race/Hispanic origin, December 2015
                                                      • Car Purchase Research

                                                        • In-person element remains crucial in car purchasing process
                                                          • Figure 33: Car purchase research, all, December 2015
                                                        • Opportunity to make test-driving more friendly for joint buyers
                                                          • Figure 34: Car purchase research, all, December 2015
                                                        • Opportunity to make young women feel more comfortable in-person
                                                          • Figure 35: Car purchase research, by gender and age, December 2015
                                                        • Professional car reviews attractive to affluent buyers
                                                          • Figure 36: Car purchase research, by household income, December 2015
                                                        • Opportunity for more test-driving among multiculturals
                                                          • Figure 37: Car purchase research, by race/Hispanic origin, December 2015
                                                      • Purchase Responsibility

                                                        • Many consumers buy independently
                                                          • Figure 38: Purchase responsibility, all, December 2015
                                                        • Women now more involved in car buying process
                                                          • Figure 39: Purchase responsibility, by gender, December 2015
                                                        • Car buying can represent independence for Millennials
                                                          • Figure 40: Purchase responsibility, by generation, December 2015
                                                        • Parents, surprisingly, buy independently
                                                          • Figure 41: Purchase responsibility, by generation, December 2015
                                                        • Blacks more likely to be buying independently
                                                          • Figure 42: Purchase responsibility, by race/Hispanic origin, December 2015
                                                      • Type of Vehicle for Next Purchase

                                                        • SUV/Crossover most popular vehicle
                                                          • Figure 43: Dodge online ad, 2016
                                                          • Figure 44: Toyota print ad, 2016
                                                          • Figure 45: Chevrolet online ad, 2016
                                                          • Figure 46: Type of vehicle for next purchase, all, December 2015
                                                        • Large vehicles making a strong comeback
                                                          • Figure 47: Type of vehicle for next purchase, by age, December 2014 versus December 2015
                                                        • Income plays a significant role in choice of vehicle type
                                                          • Figure 48: Type of vehicle for next purchase, by household income, December 2015
                                                        • Majority of Blacks purchase midsize/large cars
                                                          • Figure 49: Type of vehicle for next purchase, by race Hispanic/origin, December 2015
                                                      • Appendix – Data Sources and Abbreviations

                                                        • Data sources
                                                          • Sales data
                                                            • Fan chart forecast
                                                              • Consumer survey data
                                                                • Direct marketing creative
                                                                  • Abbreviations and terms
                                                                    • Abbreviations
                                                                      • Terms

                                                                      Companies Covered

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                                                                      Car Purchasing Process - US - April 2016

                                                                      US $3,995.00 (Excl.Tax)