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Car Purchasing Process - US - May 2017

"Purchasing a car is an extremely important decision for most Americans, as it is typically the second most expensive purchase consumers make after their homes. The automotive marketplace is filled with options for consumers to consider: which brand, body style, specific model, new or used, all at an affordable price point for the buyer. Consumers navigate these factors throughout their purchasing process. Retailers and brands will need to reach consumers with content relevant to the stage shoppers are in to keep their vehicles in consideration at the point of purchase."
- Buddy Lo, Automotive Analyst

This Report discusses the following key topics:

  • Car buying is a stressful process according to most car shoppers
  • Many are worried they will overpay for their next vehicle
  • Multiple shopping resources used in purchase process

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

          • The issues
            • Car buying is a stressful process according to most car shoppers
              • Figure 1: Attitudes toward car purchasing – Buying a car is stressful, by gender, March 2017
            • Many are worried they will overpay for their next vehicle
              • Figure 2: Attitudes toward car purchasing – Price, by age, March 2017
            • Multiple shopping resources used in purchase process
              • Figure 3: Shopping resources, March 2017
            • The opportunities
              • Shoppers know the body style, but not the brand of their next vehicle
                • Figure 4: Pre-purchase decisions, March 2017
              • Third-party site users cross-shop multiple platforms
                • Figure 5: Shopping resources, by third-party sites, March 2017
              • Younger shoppers open to alternative buying processes
                • Figure 6: Attitudes toward car purchasing, by age, March 2017
              • What it means
              • The Market – What You Need to Know

                • New vehicle sales look stagnant for 2017
                  • Larger vehicles continue to sell
                    • Off-lease vehicles flood used car market
                      • Low gas prices expected to stay low
                      • Market Size and Forecast

                        • Overall automotive market plateaus before forecasted growth
                          • Figure 7: Total US unit sales and fan chart forecast of new and used light vehicles, 2011-21
                          • Figure 8: Total US unit sales and forecast of new and used light vehicles, 2011-21
                      • Market Breakdown

                        • Consumer preference shifts from light cars to light trucks
                          • Used car market will continue to grow
                            • Figure 9: Total U.S. unit sales and forecast of new and used light vehicles, by segment, 2011-21
                            • Figure 10: Total U.S. unit sales of new and used light vehicles, by segment, 2014 and 2016
                        • Market Factors

                          • Federal Reserve interest rate hike could slow sales
                            • Average national gas prices remain below $2.50
                              • Figure 11: US gasoline and diesel retail prices, January 2007-April 2017
                            • Consumer confidence remains high
                              • Figure 12: Consumer Sentiment Index, January 2007-March 2017
                            • Age of vehicles on the road
                              • Figure 13: Average age of vehicles, 1996-2016
                            • Used car market will face influx of off-lease vehicles
                            • Key Players – What You Need to Know

                              • Carvana planning to go public
                                • Beepi shutters operations
                                  • Tesla challenging long-established franchise dealer sales model
                                  • What’s Working?

                                    • CarMax’s sales process attractive to used car shoppers
                                      • Third-party advertising sites provide a neutral platform for consumers
                                        • Carvana applies for initial public offering
                                        • What’s Struggling?

                                          • Beepi shutters operations
                                            • Kelley Blue Book’s email marketing
                                              • Figure 14: Third-party advertising email marketing competitive landscape, January 2016-December 2016
                                              • Figure 15: Third-party advertising email marketing inbox rate, read rate, and volume, January 2016-December 2016
                                          • What’s Next?

                                            • Tesla challenges the franchise dealership model
                                              • Start-ups continue quest to sell cars online
                                              • The Consumer – What You Need to Know

                                                • English speaking Millennial Hispanics show highest purchase intent
                                                  • Shoppers know what body style, but not the brand of their next vehicle
                                                    • More car shoppers classified as Adversarial Shoppers
                                                    • Purchase Intent

                                                        • Nearly three in 10 consumers plan to buy within the year
                                                          • Figure 16: Purchase intent, March 2017
                                                        • Purchase intent trending down
                                                          • Figure 17: Purchase intent, July 2016-March 2017
                                                        • Two in 10 consumers younger than 35 plan to buy within six months
                                                          • Figure 18: Purchase intent, by age, March 2017
                                                        • Millennial Hispanics show high intent in near future
                                                          • Figure 19: Purchase intent, by Hispanic origin and generation, March 2017
                                                      • Trade-in Intent

                                                          • Half of buyers with a vehicle in the household intend to trade in
                                                            • Figure 20: Trade-in intent, March 2017
                                                          • Six in 10 fathers considering a trade-in
                                                            • Figure 21: Trade-in intent, by gender and parental status, March 2017
                                                        • Type of Purchase

                                                            • Majority of consumers remain aspirational for their next vehicle
                                                              • Figure 22: Purchase type, March 2017
                                                            • Age and income are main factors in purchase type
                                                              • Figure 23: Purchase type, by age and household income, March 2017
                                                          • Pre-purchase Decisions

                                                              • Car shoppers likely to buy from a dealer and know the body style
                                                                • Figure 24: Pre-purchase decisions, March 2017
                                                              • As purchase nears, brand preference comes to mind
                                                                • Figure 25: Pre-purchase decisions, by purchase intent, March 2017
                                                              • Men are likely to be sole decision maker for the next vehicle purchase
                                                                • Figure 26: Pre-purchase decisions, by gender and relationship status, March 2017
                                                                • Figure 27: Volkswagen 2017 Spring Three And Easy Event | "Coffee", March 2017
                                                            • Purchase Reasons

                                                                • Desire for a newer vehicle tops reasons for purchase
                                                                  • Figure 28: Purchase reasons, March 2017
                                                                • Younger car shoppers want a vehicle that is more fun to drive
                                                                  • Figure 29: Purchase reasons, by age, March 2017
                                                                • Parents need a larger vehicle for the kids
                                                                  • Figure 30: Purchase reasons, by parental status, March 2017
                                                              • Research Topics

                                                                  • Car performance features tops research topics
                                                                    • Figure 31: Research topics, March 2017
                                                                    • Figure 32: Research topics, by nets, March 2017
                                                                  • CPO shoppers do more research
                                                                    • Figure 33: Research topics, by purchase type, March 2017
                                                                  • Women more likely than men to research safety features
                                                                    • Figure 34: Research topics, by gender, March 2017
                                                                  • Research topics – TURF analysis
                                                                    • Figure 35: TURF Analysis – Vehicle research, March 2017
                                                                • Shopping Resources

                                                                    • Most shoppers are using or plan to use a dealer or manufacturer’s site
                                                                      • Figure 36: Shopping resources, March 2017
                                                                    • Online buying sites used exclusively by younger consumers
                                                                      • Figure 37: Shopping resources, by age, March 2017
                                                                    • Third-party site users cross-shop multiple sites
                                                                      • Figure 38: Shopping resources, by third-party sites, March 2017
                                                                    • Cars.com and KBB top third-party sites for English-speaking Hispanics
                                                                      • Figure 39: Shopping resources, by Hispanic origin, March 2017
                                                                    • Shopping resources – Correspondence analysis
                                                                      • Figure 40: Correspondence analysis – Shopping resources, March 2017
                                                                  • Research Methods

                                                                      • Test-driving is the top method for researching
                                                                        • Figure 41: Research methods, March 2017
                                                                      • More consumers use an app or watch online videos closer to purchase
                                                                        • Figure 42: Research methods, by purchase intent, March 2017
                                                                      • Consumer reviews top professional reviews
                                                                      • Attitudes toward Car Purchasing

                                                                          • Nearly eight in 10 consumers will consider maintenance costs
                                                                            • Figure 43: Attitudes toward car purchasing, March 2017
                                                                          • Millennials don’t trust car salespeople
                                                                            • Figure 44: Attitudes toward car purchasing, by generation, March 2017
                                                                          • Younger car shoppers regardless of gender worry about overpaying
                                                                            • Figure 45: Attitudes towards car purchasing, by gender and age, March 2017
                                                                        • Car Purchasing Process Cluster Analysis

                                                                          • Car shoppers classified into three different segments
                                                                            • Figure 46: Car purchasing process segments, March 2017
                                                                          • Adversarial Shoppers
                                                                            • Characteristics
                                                                              • Opportunities
                                                                                • Figure 47: Profile of Adversarial Shoppers, March 2017
                                                                              • Empowered Shoppers
                                                                                • Characteristics
                                                                                  • Opportunities
                                                                                    • Figure 48: Profile of Empowered Shoppers, March 2017
                                                                                  • Unconventional Shoppers
                                                                                    • Characteristics
                                                                                      • Opportunities
                                                                                        • Figure 49: Profile of Unconventional Shoppers, March 2017
                                                                                    • Appendix – Data Sources and Abbreviations

                                                                                      • Data sources
                                                                                        • Sales data
                                                                                          • Fan chart forecast
                                                                                            • Consumer survey data
                                                                                              • Direct marketing creative
                                                                                                • Abbreviations and terms
                                                                                                  • Abbreviations
                                                                                                    • Terms
                                                                                                      • Methodology – TURF analysis
                                                                                                        • Methodology – Correspondence analysis
                                                                                                        • Appendix – The Market

                                                                                                            • Figure 50: Total US unit sales of total used light vehicles and CPO light vehicles, 2011-16

                                                                                                        Companies Covered

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                                                                                                        Car Purchasing Process - US - May 2017

                                                                                                        US $3,995.00 (Excl.Tax)