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US Car Purchasing Process market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Car Purchasing Process market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Definition

This Report builds on the analysis presented in Mintel’s Car Purchasing Process – US, May 2017 and Car Purchasing Process – US, April 2016. Mintel defines car purchasing as the act or the intended act of buying a new, used, or CPO (certified pre-owned) vehicle.

This Report includes all light vehicles, which includes but is not limited to sedans, coupes, station wagons, pickup trucks, vans, minivans, crossover utility vehicles, and SUVs (sport utility vehicles). Fleet sales are included in Market Size sales figures, but are excluded from the scope of this Report.

What you need to know

For many Americans, a vehicle is not a luxury item but a necessary tool for economic opportunity. A vehicle is also likely the second most expensive purchase for a household, after the home. With the proliferation of vehicle information available online, and the ease of access to that information, consumers perform much of their research before reaching a dealership. Marketers must reach shoppers with the right messaging and pertinent information to best increase consideration during the car purchasing process.

Expert analysis from a specialist in the field

Written by Buddy Lo, a leading analyst in the Automotive sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The household vehicle is typically the second most expensive purchase consumers make besides a home, and for American consumers it is often a necessary purchase. Consumers have a plethora of options available and must navigate those options to find the best vehicle for their budget and lifestyle. In an industry rife with trust issues, consumers turn to the internet to best educate themselves for their prospective purchase. Brands and dealerships must engage with consumers digitally and locally with the pertinent information to best retain consumer attention in today’s high paced environment. Buddy Lo
Automotive Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • The issues
            • Car purchasing process remains a stressful endeavor for shoppers
              • Figure 1: Attitudes toward car purchasing, by gender and age, March 2018
            • Older Millennials have trust issues with automotive sales
              • Figure 2: Attitudes toward car purchasing, by millennials vs non millennials, March 2018
            • Purchase location remains undecided until moment of purchase
              • Figure 3: Pre-purchase decisions, by purchase intent, March 2018
            • The opportunities
              • Millennials show the highest purchase intent among generations
                • Figure 4: Purchase intent, by generation, March 2018
              • Brands can conquest sales by winning on lifestyle
                • Figure 5: Pre-purchase decisions, March 2018
              • More than four in 10 Millennial car shoppers would buy online
                • Figure 6: Attitudes toward car purchasing, by generation, March 2018
              • What it means
              • The Market – What You Need to Know

                • Overall vehicle sales market forecasted for growth
                  • Interest rates set to increase multiple times
                    • Unemployment at record lows and consumer confidence remains high
                      • Gas prices slowing creeping back to $3 gallon levels
                        • Market sales continue to lean toward larger light trucks
                        • Market Size and Forecast

                          • Overall vehicle sales continue to grow
                            • Figure 7: Total US unit sales and fan chart forecast of new and used light vehicles, at current prices, 2013-23
                            • Figure 8: Total US unit sales and forecast of new and used light vehicles, 2013-23
                        • Market Breakdown

                          • Used vehicle sales account for over two thirds of total vehicle sales
                            • Figure 9: Total US unit sales and fan chart forecast of used cars and light trucks, at current prices, 2013-23
                          • Light trucks continue to gain market share over passenger cars through 2018
                            • Figure 10: New vehicle sales, by vehicle class, January 2018-May 2018
                        • Market Factors

                          • Interest rates set to increase multiple times in 2018
                            • Gas prices creep closer to $3.00 per gallon
                              • Figure 11: US gasoline and diesel retail prices, January 2007-May 2018
                            • Low unemployment paired with high consumer confidence
                              • Figure 12: Consumer confidence and unemployment, 2000-April 2018
                          • Key Players – What You Need to Know

                            • CarGurus sent an estimated 2 billion emails in 2017
                              • Toyota has largest online ad presence among auto brands
                                • Carvana scales up but sees increasing losses
                                  • Vehicle subscription services emerge as alternative to vehicle ownership
                                  • What’s Working?

                                    • CarGurus leads third-party sites in email marketing volume
                                      • Figure 13: Third-party automotive site email marketing performance, 2017
                                    • Toyota leads manufacturers in online ad spend for 2017
                                      • Figure 14: Top 25 online ad spend, by auto brands, 2017
                                  • What’s Struggling?

                                    • Carvana’s losses pile on as it scales its business
                                      • Vroom lays off staff, halts operations in two locations
                                      • What’s Next?

                                        • Subscription services provides new model for vehicle access
                                          • Book by Cadillac
                                            • Care by Volvo
                                              • Porsche Passport
                                                • Ford Canvas
                                                  • Flexdrive
                                                  • The Consumer – What You Need to Know

                                                    • Parents and Millennials show high immediate purchase intent
                                                      • Car shoppers aspire to purchase new over used
                                                        • Body style decided before branding in consumer journey
                                                          • Car shoppers agree the process is stressful
                                                            • Women more likely to consult outside help in shopping process
                                                            • Purchase Intent

                                                              • Consumer purchase intent remains stable
                                                                • Figure 15: Purchase intent, March 2018
                                                                • Figure 16: Purchase intent, July 2016-March 2018
                                                              • Parents with one or two children have high immediate purchase intent
                                                                • Figure 17: Number of children in the household, by vehicle purchase intent, March 2018
                                                              • Major life events also a primary driver behind a new vehicle purchase
                                                                • Figure 18: Purchase intent, by major life events, March 2018
                                                              • Millennials show highest purchase intent among generations
                                                                • Figure 19: Purchase intent, by generation, March 2018
                                                            • Purchase Type

                                                              • Majority of car shoppers considering buying new
                                                                • Figure 20: Purchase type, March 2018
                                                              • Household income strong determinant of purchase type
                                                                • Figure 21: Purchase type, by household income, March 2018
                                                              • Used vehicle consideration increases closer to purchase decision
                                                                • Figure 22: Purchase type, by purchase intent, March 2018
                                                            • Trade-in Intent

                                                              • Nearly two thirds of car owners plan to trade in their vehicle
                                                                • Figure 23: Trade-in intent, March 2018
                                                              • Two-vehicle households most likely to plan to trade in
                                                                • Figure 24: Trade-in intent, by household vehicles, March 2018
                                                              • Shoppers planning a trade-in are more likely to consider a new vehicle
                                                                • Figure 25: Purchase type, by trade-in intent, March 2018
                                                                • Figure 26: Mike Reed Chevrolet, retention email, May 2018
                                                                • Figure 27: Huston Chevrolet, direct mail, April 2018
                                                            • Pre-purchase Decisions

                                                              • Body style takes precedence over branding in decision process
                                                                  • Figure 28: Pre-purchase decisions, March 2018
                                                                • Older shoppers are more decisive when it comes to their next vehicle
                                                                  • Figure 29: Pre-purchase decisions, by age, March 2018
                                                                • Men more likely than women to know the brand of the next purchase
                                                                  • Figure 30: Pre-purchase decisions, by gender, March 2018
                                                                • Parents, especially moms, set monthly budgets
                                                                  • Figure 31: Pre-purchase decisions, by parental status, March 2018
                                                                  • Figure 32: Pre-purchase decisions, by parental status by gender, March 2018
                                                                • Purchase location undetermined even late in car purchasing process
                                                                  • Figure 33: Pre-purchase decisions, by plan to purchase next vehicle, March 2018
                                                              • Research Topics

                                                                • Fuel efficiency tops consumer research topics
                                                                  • Figure 34: Research topics, March 2018
                                                                • Women and older men interested in safety features
                                                                  • Figure 35: Research topics, by age and gender, March 2018
                                                                • Those interested in cargo features likely know the body style of their next vehicle
                                                                  • Figure 36: Pre-purchase decisions, by research topics, March 2018
                                                                • Research Topics TURF Analysis
                                                                  • Figure 37: TURF analysis – Vehicle research, March 2018
                                                              • Research Methods

                                                                • Test drives remain the primary research method
                                                                  • Figure 38: Research methods, March 2018
                                                                • Women more likely than men to consult outside help
                                                                    • Figure 39: Research methods, by gender and age, March 2018
                                                                  • Positive online reputation will help win Millennials
                                                                    • Figure 40: Research methods, by generation, March 2018
                                                                • Vehicle Uses

                                                                  • Driving for commute, pleasure, and vacations top vehicle usage plans
                                                                    • Figure 41: Vehicle uses, March 2018
                                                                  • More than a tenth of Millennials and iGens look to drive for a ride share service
                                                                    • Figure 42: Vehicle uses, by generation, March 2018
                                                                • Attitudes toward Car Purchasing

                                                                  • Car shopping process leaves a lot to be desired
                                                                      • Figure 43: Attitudes toward car purchasing, part 1, March 2018
                                                                    • Nearly half of car shoppers find salespeople untrustworthy
                                                                        • Figure 44: Attitudes toward car purchasing, part 2, March 2018
                                                                      • Consumer mistrust increases closer to purchase point
                                                                        • Figure 45: Attitudes toward car purchasing, by purchase intent, March 2018
                                                                      • Millennials most receptive to alternative car buying experiences
                                                                        • Figure 46: Attitudes toward car purchasing, by generation, March 2018
                                                                        • Figure 47: Attitudes toward car purchasing, by generation, March 2018
                                                                    • Cluster Analysis

                                                                        • Figure 48: Cluster analysis of attitudes toward car purchasing, March 2018
                                                                      • Confident Shoppers
                                                                        • Characteristics
                                                                          • Figure 49: Pre-purchase decisions, by cluster groups, March 2018
                                                                          • Figure 50: Profile of Confident Shoppers, March 2018
                                                                        • Opportunities
                                                                          • Alternative Shoppers
                                                                            • Characteristics
                                                                              • Figure 51: Attitudes toward car purchasing, by cluster groups, March 2018
                                                                              • Figure 52: Profile of Alternative Shoppers, March 2018
                                                                            • Opportunities
                                                                              • Figure 53: Attitudes toward car purchasing, by cluster groups, March 2018
                                                                              • Figure 54: Purchase intent, by cluster groups, March 2018
                                                                            • Cost-focused Shoppers
                                                                              • Characteristics
                                                                                • Figure 55: Profile of Cost-focused Shoppers, March 2018
                                                                              • Opportunities
                                                                                • Figure 56: Pre-purchase decisions, by cluster groups, March 2018
                                                                              • Ambivalent Shoppers
                                                                                • Characteristics
                                                                                  • Figure 57: Profile of Ambivalent Shoppers, March 2018
                                                                                • Opportunities
                                                                                • Appendix – Data Sources and Abbreviations

                                                                                  • Data sources
                                                                                    • Sales data
                                                                                      • Fan chart forecast
                                                                                        • Consumer survey data
                                                                                          • Consumer qualitative research
                                                                                            • Direct marketing creative
                                                                                              • Abbreviations and terms
                                                                                                • Abbreviations
                                                                                                • Appendix – The Market

                                                                                                    • Figure 58: US new vehicle sales, by brand, 2017
                                                                                                    • Figure 59: New vehicle US sales and forecast, 2013-23
                                                                                                    • Figure 60: Total new vehicle US sales and fan chart forecast, 2013-23