Over the past decade, new-car prices have continued to climb, and we may finally have reached a point where consumers say enough is enough.
Cox Automotive’s 2019 Car Buyer Journal study showed nearly 2 out of 3 car shoppers primarily shopped the used-car market rather than look at a new vehicle, Automotive News (subscription required) reported last Thursday. The shift to used cars comes as the average new car payment in the United States rose to $547.75 in 2018. The figure is up 4 percent from 2017. Meanwhile, the average used car payment is $411.04, up 2 percent from 2017.
Isabelle Helms, vice president of research and market intelligence for Cox Automotive, said it shows that consumers are finally starting to feel the squeeze on their wallets and more buyers are turning away from new-car dealers for used car lots to keep things affordable. The shift is not good news for automakers, who obviously want to push new metal.
Independent and franchised dealers with large used-car inventories, however, are grinning ear-to-ear.
The study looked at 3,086 car buyers who purchased their vehicles in the last 12 months and used the internet for their shopping or buying process. A two-year comparison was used to ensure findings were solid and not a quick blip in the market. Of those surveyed, 28 percent said they only considered used vehicles, up from 23 percent in 2016. Another 36 percent said they primarily shopped for used vehicles, but also looked at some new models as well. The figure is identical to 2016 findings.
The latest study continues to affirm growing pains among consumers having difficulty affording new vehicles. Previously, a study found the majority of pickup truck owners felt their vehicle was overpriced. Some added they would not consider another truck as their next vehicle due to the affordability factor. Indeed, as new vehicle prices have risen in the past decade, truck prices have grown even quicker and higher.
Source: Automotive News (subscription required)