Supply chain shortages continue to impact the auto industry and consumers in the market for both new and used vehicles. A recent CivicScience survey discovered that a total of 26% of U.S adults have recently experienced inventory shortages when shopping for a car: 16% were shopping at a new car dealership and 10% were buying used.
The current data indicate a three point increase in shortage-related experiences among new car buyers since early November of 2021, when 13% were confronted with purchasing issues related to chip shortages.
Sky-high vehicle prices, rising fuel costs and general inflation are dramatically affecting consumer sentiment. Looking at a yearly average for 2022 thus far, the majority of Americans (56%) feel that now is a bad time to invest in a major purchase such as a new car or home improvement, marking one of the highest points seen on the index since CivicScience began tracking sentiment prior to 2017.
However, tracking also shows that vehicle demand is holding steady: 20% of people today say they are likely to purchase or lease a new vehicle in the next three months, while 21% are likely to buy used. This represents an increase in demand for both new and used cars from the first half of 2021, which also coincides with increasing interest in electric vehicles.
Changes in Purchasing Behaviors
While purchase intent remains consistent, survey results suggest that car-buying behavior varies widely in response to supply chain issues.
When faced with not being able to secure a desired make and model for a new vehicle, 35% of buyers would choose to purchase an alternative new vehicle rather than wait for availability, buy used, or postpone buying at all. Among those buyers, just over half (54%) would stick with a different model from the same manufacturer, while the remainder would turn to a different manufacturer.
On the other hand, 30% of people would stretch their purchasing window and wait for their first choice to become available, some even willing to hold out for six months.
Buying used is not an ideal option for most in the new car market: just 19% of people say they would buy a used vehicle instead of a new one.
It’s likely that the increasing reach of supply shortages is promoting certain sentiments more than others when it comes to car buying. A growing number of people today say they would purchase a new vehicle from the same manufacturer, indicating new car buyers are becoming more flexible in their choices.
In fact, nearly 40% of recent new car buyers say they would buy a different model from the same manufacturer, suggesting that brand is a leading concern for new car buyers when faced with supply shortages.
When it comes to vehicle types, SUVs continue to rank as the most popular option, followed by trucks.
People who plan to purchase an SUV or crossover are the most likely to wait for their desired make and model to become available, whereas potential truck buyers are less likely to wait and much more likely to turn to a different manufacturer. On the other hand, those shopping for a sedan are the most likely to buy a different model from the same manufacturer, as well as the most likely to buy used.
Finally, a quick breakdown of price expectations shows that a majority (56%) of consumers are anticipating to spend between $10,000 to $40,000 on their next vehicle purchase.
Leasing represents an increasingly popular option for acquiring a car – 12% of consumers now say they plan to lease a vehicle. With monthly payments typically lower than financing, leasing may have a greater appeal today.
All in all, vehicle supply shortages are affecting more Americans today and financial concerns are weighing heavily on the minds of consumers. Even so, that isn’t stopping most Americans from pursuing vehicles altogether, but rather is impacting how they make purchases in specific ways.