Newsroom Articles

Consumer Insights

July 11, 2023

6 Minute Read

The 411 of Economic Impacts on Vehicle Purchase Intent

With economic uncertainty top of mind for both car shoppers and dealers, we sought out to understand where consumers currently stand regarding the economy and their vehicle purchase intentions. Dealership operators well apprised of consumer outlook as well as the concerns of consumers shopping for a car have an opportunity to tailor the consumer experience to align to their unique needs and possible apprehensions.

Overall, the likelihood of consumers intending to purchase a vehicle this year has substantially increased, with consumer research indicating that purchase intentions have continued to rise since March of 2022. Despite sustained car shopper concerns about the economy overall, both now and over the next six months, consumers demonstrate a positive view of their current and future personal financial position.

Intentions to Buy a Vehicle in the Next 6 Months

According to a recent DIG Insights research study that surveyed consumers across Canada, 28% of Canadians intend to buy a vehicle in the next six months. That’s up four points from 24% in October of 2022, and a considerable rise from the baseline of 16% in May 2020.

Pent-up demand resulting from pandemic-fuelled lockdown measures remains present, and car shoppers are ready to act on it. More than half of vehicle purchase intenders somewhat or strongly agree that now is a good time to make a major purchase, and 84% are confident in their current financial situation. That confidence level is expected to hold over the upcoming six months, as 12% believe their financial situation will improve a lot; 37% say it will improve a little; and 36% think it will remain unchanged.

Now Is a Good Time to Make a Major Purchase

While more consumers intend to buy a vehicle and are positive about their finances, there are issues for them to overcome from the very onset of their car buying journey. Among the top economic worries affecting their decision to purchase, the highest is inflation (80%), followed closely by high vehicle prices (79%), and high gas prices (75%). Elevated interest rates (73%) and inventory shortages (69%) round out the responses. These factors result in consumers spending far more time comparison shopping and could lead to a reduction in their vehicle purchase budget or even delay the purchase entirely.

Although dealerships aren’t in a position to alter or impact most of these factors, they can finetune their outreach to aid shoppers with stickhandling the issues. When vehicles are advertised on AutoTrader.ca with prices that jive with fair market value, a “Great” or “Good” price badge is populated to the inventory listing. Price transparency builds confidence and trust with car shoppers, particularly with those shopping on a budget. Additionally, highlight fuel efficiency ratings for gas-sipping models or electric vehicle options, and advertise every unit you have in stock, to ensure shoppers can browse a variety of vehicles without arousing any fear of inventory scarcity.

Making your dealership stand out is essential, particularly in consideration of the significant rise in early-stage vehicle shoppers visiting online automotive marketplaces as a top source in the car buying journey. Among survey respondents, 84% of shoppers went online as part of the process, up from 78% in 2022. Of the available online sources, 42% visit online automotive marketplaces, which is up from 33% in 2022. If your dealership does not have a robust and fulsome online presence, you’re negatively impacting your ability to reach a large audience who want to buy what you have to sell.

Information Sources Leveraged by Used Vehicle Intenders Infographic

In consideration of the survey findings, it’s more important than ever before to get your used inventory listed on online automotive marketplaces. Those at the outset of their car buying journey visit an average of 3.8 sources when shopping, but the sources used depend wholly on what they’re considering. Among new car shoppers, 48% visit manufacturer sites, versus 39% using online automotive marketplaces. With consumers interested in used vehicles, 55% frequent automotive marketplaces, while 33% browse automaker sites.

Overall, car buyers remain active and primed to purchase – so do your part to ensure they’re making their way to purchase through you!

Key Takeaways

Despite impacts to the economy, purchase intentions are rising among car shoppers
Used car intenders use automotive marketplaces as their top online source, making it imperative that your inventory is available for them to browse
Consumers have high confidence in their current financial situation, understanding their financial confidence is key to ensure you can share the most relevant and attractive payment options
Understanding what could impact a purchase can help seal the deal, be transparent with the descriptive text you populate to your listings and seek to gain a firm hold of consumer concerns or hesitations about finalizing their purchase