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Hispanics and the Car Purchasing Process - US - June 2016

Hispanics are more likely than the average to plan on buying a car in the next three years. As they go through the car buying process, Hispanics show some flexibility in terms of the makes and models they want, particularly when they intend to purchase a used car. Hispanics are pragmatic car buyers, who are not always impressed by features they don’t feel they need. While their primary source of information when researching is the internet, it doesn’t diminish the role of dealerships in any way, as test-drives are critical and first impressions and the quality of service still matter.

This report examines the following areas:

  • Hispanics show higher purchase intent
  • Hispanics’ budget for vehicles strongly correlated to household income
  • Most Hispanics do their research online, then test live

Mintel defines car purchasing as the act or the intended act of buying a new, used, or CPO (certified pre-owned) vehicle. Types of vehicles referenced include: all cars, station wagons, sedans, pickup trucks, vans, minivans, crossover utility vehicles, and SUVs (sport utility vehicles).

This Report offers an overview of how Hispanics approach the car purchasing process, including purchase intent, current vehicle’s ownership, purchase plans (ie, new vs used), openness to different brands and models, research sources, and how Hispanics use the internet. The Report also includes Hispanics’ attitudes toward car dealerships as well as payments, price, and value. Where applicable, findings are analyzed by key demographics including age, gender, household income, language spoken at home, and level of acculturation.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Hispanics show higher purchase intent
            • Figure 1: Vehicle purchase intent, by Hispanic origin, December 2015 and March 2016
          • Hispanics’ budget for vehicles strongly correlated to household income
            • Figure 2: Median amount Hispanics paid for last vehicle purchased, by household income, October 2014-December 2015
          • Most Hispanics do their research online, then test live
            • Figure 3: Hispanics’ vehicle purchase research plans – Select items, by level of acculturation, March 2016
          • The opportunities
            • Understanding differences in how Hispanics research online
              • Figure 4: Hispanics’ plans for using internet research, by gender and age, March 2016
              • Figure 5: Hispanics’ plans for using internet research – Select items, by level of acculturation, April 2016
            • Aiming for differentiation
              • Figure 6: Hispanics’ attitudes toward car dealerships – Any agree for select items, March 2016
            • Helping Hispanics understand car loans
              • Figure 7: Hispanics’ attitudes toward payments, price, value – Any agree for select items, April 2016
            • What it means
            • The Market – What You Need to Know

              • Hispanics show greater purchase intent
                • Hispanic men drive enthusiasm, but…
                  • Hispanics are practical when buying cars
                    • Some market factors cause optimism, but also highlight challenges
                    • Car Purchasing Prospects

                      • Hispanics more likely to want to buy sooner
                        • Figure 8: Vehicle purchase intent, by Hispanic origin, December 2015 and March 2016
                        • Figure 9: Car buyers’ responsibility for purchase, by Hispanic origin, March 2016
                      • Hispanic men drive purchase intent
                        • Figure 10: Hispanics’ vehicle purchase intent, by gender and age, March 2016
                        • Figure 11: Hispanic car buyers’ responsibility for purchase, by gender and age, March 2016
                      • Higher-household incomes enable Hispanics to consider new cars
                        • Figure 12: Hispanics’ vehicle purchase intent, by household income, March 2016
                        • Figure 13: Hispanic car buyers’ responsibility for purchase, by household income, March 2016
                    • Market Perspective

                      • Hispanics are pragmatic buyers
                        • Cars don’t necessarily have to be fun to drive
                          • Figure 14: Attitudes toward automobiles – Cars fun to drive – Any agree, Hispanics vs All, by household income, October 2014-December 2015
                        • Options don’t necessarily add value
                          • Figure 15: Attitudes toward automobiles – Options impress – Any agree, Hispanics vs All, language spoken at home, October 2014-December 2015
                          • Figure 16: Features in most recent acquired vehicle, Hispanics indexed to All, October 2014-December 2015
                        • Cars are seen as tools
                          • Figure 17: Attitudes toward automobiles – Use of personal vehicle at work – Any agree, Hispanics vs All by, language spoken at home, October 2014-December 2015
                      • Market Factors

                        • Low unemployment can give Hispanics confidence to spend
                          • Figure 18: Hispanic unemployment (seasonally adjusted), January 2007-April 2016
                        • Hispanics more restricted financially
                          • Median household income for Hispanics significantly below national median
                            • Figure 19: Median household income, by race and Hispanic origin of householder, 2014
                          • More than half of Hispanic households bring home less than $50K
                            • Figure 20: Household income distribution by race and Hispanic origin of householder, 2014
                          • Average age of cars in the US at all-time high
                            • Figure 21: Average age of passenger cars and light trucks, 1995-2014
                        • Marketing Approach – What You Need to Know

                          • Some of the things that are working
                            • Offers and features
                              • Combined efforts
                                • Some of the things to keep an eye on
                                  • Fixed prices should be handled with care
                                    • Some of the things affecting the industry moving forward
                                      • Quality service
                                        • Vehicle recalls
                                        • What’s Working?

                                          • Highlighting offers and features
                                            • Achieving differentiation through synergy
                                            • What Needs to be Handled with Care?

                                              • Fixed or “no-haggle” prices
                                              • What’s Next?

                                                • Focus on quality service
                                                  • Vehicle recalls
                                                  • The Consumer – What You Need to Know

                                                    • Household income a key factor in purchasing vehicles
                                                      • New versus used expectations are determined by what’s in their wallets
                                                        • Plans for used cars demands more flexibility
                                                          • Most homework is done online, but test-drives are decisive
                                                            • Different groups focus their online searches differently
                                                              • At the dealership
                                                                • First impressions matter
                                                                  • Price negotiation is expected
                                                                    • Longer loan durations okay to lower monthly payments
                                                                    • Vehicle Ownership

                                                                      • Hispanics buy vehicles as soon as they can afford one
                                                                        • Figure 22: Vehicle ownership, by Hispanic origin and household income, October 2014-December 2015
                                                                        • Figure 23: Number of vehicles owned/leased by Hispanic households, by household income, October 2014-December 2015
                                                                      • Hispanics equally likely to own domestic and import vehicles
                                                                        • Figure 24: Type(s) of vehicle(s) Hispanic households own, indexed to all, October 2014-December 2015
                                                                      • Hispanics tend to spend less than the average US consumer per vehicle
                                                                        • Figure 25: Amount paid for last vehicle purchased, Hispanics vs All, October 2014-December 2015
                                                                        • Figure 26: Amount Hispanics paid for last vehicle purchased, by household income, October 2014-December 2015
                                                                    • Purchase Plans – New versus Used

                                                                      • Hispanics split on whether they want to buy new or used
                                                                        • Figure 27: Type of vehicle Hispanics plan to purchase – New or used, by gender and age, October 2014-December 2015
                                                                      • Higher household incomes empower Hispanics to look for new cars
                                                                        • Figure 28: Type of vehicle Hispanics plan to purchase – New or used, by household income, October 2014-December 2015
                                                                    • Purchase Plans – Knowing What They Want versus Flexibility

                                                                      • Hispanics are open to exploring brands and models
                                                                        • Figure 29: Hispanics’ buying preference of brand and model – New vs used preference, March 2016
                                                                      • SUVs’ appeal increases with acculturation
                                                                        • Figure 30: Type of vehicle Hispanics plan to purchase, indexed to all, by language spoken at home, October 2014-December 2015
                                                                    • Car Purchase Research

                                                                      • Research starts online, decisions are made by test-driving
                                                                          • Figure 31: Hispanics’ vehicle purchase research plans, March 2016
                                                                        • Acculturated Hispanics more likely to proactively research
                                                                          • Figure 32: Hispanics’ vehicle purchase research plans – Select items, by level of acculturation, March 2016
                                                                          • Figure 33: Hispanics’ vehicle purchase research plans, by household income, March 2016
                                                                      • Online Research

                                                                        • Internet provides information about makes, models, price, and dealerships
                                                                          • Figure 34: Hispanics’ plans for using internet research, March 2016
                                                                        • Hispanic men 35+ more likely to use the internet to define value
                                                                          • Figure 35: Hispanics’ plans for using internet research, by gender and age, March 2016
                                                                        • Online research about pricing increases with acculturation
                                                                          • Figure 36: Hispanics’ plans for using internet research, by level of acculturation, March 2016
                                                                      • Hispanics’ Attitudes toward Car Dealerships

                                                                        • Not all dealers are the same
                                                                          • Figure 37: Hispanics’ attitudes toward car dealerships – Any agree, March 2016
                                                                        • Car buying and negotiation go hand in hand
                                                                          • Figure 38: Hispanics’ attitudes toward car dealerships – Select items, by household income, March 2016
                                                                        • First impressions key to getting converts
                                                                          • Figure 39: Hispanics’ attitudes toward car dealerships – Select items, by gender and age, March 2016
                                                                      • Hispanics’ Attitudes toward Payments, Price, and Value

                                                                        • Hispanics aim to balance value with affordability
                                                                          • Figure 40: Hispanics’ attitudes toward payments, price, value – Any agree, March 2016
                                                                        • Younger Hispanics more hesitant about using car loans
                                                                          • Figure 41: Hispanics’ buying reference – Loan vs full payment and financing, by gender and age, March 2016
                                                                        • Higher-household incomes allow Hispanics to look for new cars
                                                                          • Figure 42: Hispanics’ buying reference – Loan vs full payment and financing, by household income, March 2016
                                                                        • More-acculturated Hispanics willing to explore more financing options
                                                                          • Figure 43: Hispanics’ buying reference – Financing from dealers vs financing from another institution, by level of acculturation, March 2016
                                                                      • Appendix – Data Sources and Abbreviations

                                                                        • Data sources
                                                                          • Consumer survey data
                                                                            • Abbreviations and terms
                                                                              • Abbreviations
                                                                                • Terms
                                                                                  • A note on acculturation
                                                                                  • Appendix – Consumer

                                                                                    • Key Hispanic metropolitan areas
                                                                                      • Figure 44: Metropolitan areas with the largest number of Hispanic residents, by country of origin/ancestry, 2010

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                                                                                  Hispanics and the Car Purchasing Process - US - June 2016

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