Have auto consumers been hiding in the weeds, waiting to bust out and buy a new car when the economy needs them most? Apparently, according to a new study that says 83% of consumers would at least be looking for a new vehicle in 2011 but out of need and not on a whim.
Autobytel (Stock Quote: ABTL), a consumer auto research firm that helps individuals and businesses make smart vehicle purchases, is making the case. Its recently released “Hot Report” says that while consumers aren’t exactly cheerful about the economy, that’s not going to stop them from choosing a new car in 2011.
Autobytel’s data reveal a “delayed reaction” among car consumers. The company says 60% of consumers surveyed put off buying a new car longer than usual due to the tough economy, but they can’t wait much longer to pull the trigger. That 60% - plus 23% more who just want a new car already – expect to be in the market for a new vehicle next year.
Of those surveyed, 44% have already started looking for a new set of wheels, while 22% say they’ll look within the next six months and 16% plan to begin the hunt within six to 12 months.
“A wide majority of consumers are considering purchasing a new or used vehicle in the next year even though consumer confidence in the economy has not improved significantly”, the report stated.
Demographics also come into play. J.D. Power & Associates and the American Association of Retired People, or AARP, reports that the majority of new car purchases come from the 50-plus crowd - up from 39% in 2001. The company says older consumers have more financial resources to handle a rough and tumble economy than younger consumers. And says AARP’s research director Mark Bradbury, baby boomers have the "ability to spend on higher-ticket items during harsh economic times," while "younger adults are moving back home to ease basic financial burdens, such as housing and food."
Autobytel also reports that recent months showed signs of greater activity in the new car market, a good sign for the economy and the auto industry going into 2011.
“A traditionally slower time of year for car sales, the November’s sales reports were right on track with other months, helped in part by a rise in demand for domestic trucks and SUV’s,” said Jeff Coats, chief executive officer at Autobytel. “Our survey indicates that the majority of consumers think this buying trend will continue well into 2011.”
Survey respondents say they may not be in the market to pay a premium for a new car. Most say they “would purchase a less expensive vehicle, a pre-owned vehicle or a more fuel-efficient vehicle in order to save money.”
Some other key points from the Autobytel survey:
• The majority of consumers say they have put off purchasing or leasing a vehicle because of the economy.
• The majority of consumers plan to purchase or lease a vehicle in the next 12 months.
• A vehicle is the next major purchase most respondents are choosing to make.
• Approximately the same number of respondents are more confident, as less confident, in the economy.
• A lower unemployment rate was the external factor with the greatest impact on the likeliness of respondents to purchase a new vehicle.
So call it a “good news/bad news” scenario for the economy, and the auto industry in particular.
Americans want - even need – to buy a new car. But they’re counting their pennies and won’t spend the big bucks needed to buy a brand new vehicle.
At least that’s progress. At this point, car makers will take any progress they can get.
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