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How the economy is influencing car buying
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Inflation and other economic factors are influencing the attitudes and actions of car buyers in Canada, according to a survey from Canadian Black Book.
Furthermore, higher prices have pushed shoppers to look at more options when buying a vehicle.
DesRosiers recently reported that the average transaction price is nearly $50,000 for a light vehicle.
From the Canadian Black Book survey, it found that purchase price is the most important consideration when buying a vehicle for 44 per cent of Canadians, according to the survey, which was carried out by Ipsos. It was far and away the leading reason — 12 per cent said brand preference was most important.
A little more than a quarter (28 per cent) of Canadians are looking to buy a new car in the next 12 months — and 47 per cent are unlikely. Four in 10 respondents said the cost of a new vehicle is too high.
About three in five (59 per cent) reported that increased prices will delay their vehicle purchase. Of those, nearly half (44 per cent) said they’ll delay at least a year, while 28% say 2 years. Families with kids are by far the group most likely to delay a car purchase, where 72% of those respondents indicated that they would.
Younger generations are most likely to buy a new vehicle, according to the survey. Two in five of those aged 18-34 intend to compared to 19 per cent of those 55 years and older.
The survey found that 40 per cent of Canadians intend to buy used cars due to price hikes and almost half (47 per cent) of the youngest car buyers are likely to buy used — this is a growing trend as 38 per cent were likely to in 2022.
Canadian Black Book noted that average vehicle price is up about 20 per cent. Even though only 15 per cent of Canadians knew that stat, they were aware of the rising costs associated with vehicles — a third (34 per cent) said they believed prices have jumped from 15-25 per cent. Still, 12 per cent of respondents said that they believed prices have not increased at all.
“Inflation has not left the auto industry alone as prices have seen unprecedented increases in the last year, and consumers are taking note,” says Daniel Ross, senior manager of industry insights and residual value strategy at Canadian Black Book.
The impact of inflation and economic factors on car buyers in Canada is evident in the findings of the recent survey conducted by Canadian Black Book. The rising prices of vehicles have forced shoppers to explore more options before making a purchase. According to DesRosiers, the average transaction price for a light vehicle in Canada is now nearly $50,000.
The survey reveals that for 44 percent of Canadians, the purchase price is the most crucial consideration when buying a vehicle, outweighing brand preference. Additionally, 40 percent of Canadians plan to buy used cars due to the price hikes, with almost half of the youngest car buyers inclined towards used vehicles.
Interestingly, while a little over a quarter of Canadians are looking to buy a new car in the next 12 months, a significant number (47 percent) are unlikely to do so due to the perceived high cost. Furthermore, 59 percent of respondents stated that increased prices would delay their vehicle purchase, with families with children being the group most likely to postpone buying a car.
The survey findings underscore the significant impact of inflation on the auto industry in Canada, prompting consumers to take note of the unprecedented price increases. It will be interesting to observe how these trends shape the future of car buying and the strategies adopted by industry players to cater to the changing preferences and concerns of Canadian consumers.