Commentary

Financing Deals Drive Automotive Purchases

Financing Deals Drive Automotive Purchases

According to the December Consumer Intentions and Actions Survey by BIGresearch, nearly a quarter of consumers surveyed who purchased or leased a new vehicle in the past six months said they did so because financing deals and incentives were too good to pass up, while the same number cited repairs as the reason behind the purchase.

"Automobiles are big-ticket items, and consumers are looking for value in a competitive market," said Gary Drenik, president and CEO of BIGresearch. "What they're saying is that one way manufacturers can create desirable value is by continuing to offer financing options and incentives. It's becoming expected."

As for the next six months, 10.2 percent of consumers said they are planning to purchase a car in that time frame vs. 9.7 percent in November. The top five makes currently owned by people planning to purchase a new car are Ford, Chevy, Dodge, Honda and Nissan.

Consumers who purchased a vehicle because financing deals and incentives were too good to pass up are also planning to spend more or the same than last year in the next 90 days across every retail category. In fact, 30 percent of those who took advantage of financing deals in the past six months said they'd spend more in the next 90 days than they did last year on CDs, DVDs, videos and books.

Motivations for Last Vehicle Purchase

Financing deals/incentives were too good to pass up23.2%
My lease was up6.1%
My old car had high mileage35.8%
My old car was always in the repair shop23.0%
I was tired of my old car; I wanted something new23.7%
wanted a vehicle with new "tech toys (GPS, DVD, etc.)22%
I wanted a vehicle with better gas mileage14.3%
I wanted a vehicle with better safety features14.6%
I like the style of the new models13.6%
Other33.5%

*The sum of the % totals may be greater than 100% because the respondents can select more than one answer.

Make of (Car Buyers) Vehicle Most Often Driven

1 Ford 19.4%
2 Chevrolet 14.0%
3 Dodge 7.7%
4 Honda 5.8%
5 Nissan 4.7%
6 Oldsmobile 4.5%
7 Toyota 4.4%
8 Chrysler/Plymouth 4.1%
9 Saturn 4.0%
10 GMC 3.7%
11 Mercury 2.9%
12 Mitsubishi 2.7%
13Mazda 2.7%
14 Buick 2.1%
15 Pontiac 2.1%
Top 15 84.8%

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Cost of Vehicle Most Recently Purchased

Less than $10,00032.4%
$10,001 to $15,00018.9%
$15,001 to $20,00018.8%
$20,001 to $25,00013.1%
$25,001 to $30,0009.2%
$30,001 to $40,0006.5%
Over $40,0001.1%

Source: BIGresearch, Consumer Intentions and Actions Study, December, 2003.

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