Buying a used car? 69% will consider it
Here’s an opportunity for new-car dealers to bulk up their used-car sales.
More than two-thirds of consumers would consider going pre-owned the next time they buy a vehicle — and a slight majority would be most at ease doing so at a franchised dealership, according to an Ally Financial survey.
The Harris Poll conducted the online survey of more than 2,000 U.S. adults in May on behalf of Ally Financial.
The survey showed that 69% of respondents were likely to consider buying a used vehicle the next time they were in market.
Fifty-three percent said a franchised dealership would be where they are most comfortable buying used. Twelve percent were most comfortable purchasing from an individual, 10% preferred an independent dealership and 8% were most comfortable buying from an internet-based source. Fourteen percent were unsure and 2% listed “other.”
“While there’s a lot of hype around internet auto sales within the industry, the majority of consumers are most comfortable purchasing at a franchise dealer who is part of the community and where they can ask questions,” said Matthew Arnold, senior regional vice president of auto finance at Ally Financial, in a news release.
“The challenge is for car buyers to feel more confident about their shopping experience and purchase, and the internet is a great resource for consumers before visiting a dealership,” Arnold said.
Used strong at franchised stores
Franchised dealers certainly are capitalizing on opportunities within the used-car market.
The midyear NADA Report 2019 from the National Automobile Dealers Association indicated that franchised dealers retailed 7.89 million units during the first six months of this year.
That’s up from 7.55 million used sales during the first half of 2018.
The used-vehicle sales pace franchised dealers currently are traveling is much higher than what NADA recorded earlier this decade. Here is the rundown of sales figures at the year’s midpoint:
2019: 7.89 million
2018: 7.55 million
2017: 6.91 million
2016: 7.00 million
2015: 6.76 million
2014: 6.71 million
2013: 6.65 million
Similarly, Edmunds said in its Used Vehicle Report for Q2 that franchised dealers sold 3.09 million used vehicles in the second quarter, up from 3.03 million in Q2 2018.
That also represented the highest Q2 mark in the six years included in the Edmunds data set, as shown below:
Q2 2014: 2,839,086
Q2 2015: 2,885,039
Q2 2016: 2,906,081
Q2 2017: 2,946,072
Q2 2018: 3,028,734
Q2 2019: 3,089,604
Price looms large
As far as why consumers choose to go used, price continues to dominate, especially in light of rising new-car prices.
Sixty-one percent of the Ally survey respondents who bought used said they did so it was less expensive. Meanwhile, 40% said they liked the used vehicle’s brand or model and 34% said they received “more car for their money,” according to the survey, which allowed respondents to list more than one answer.
“With new vehicle prices approaching $38,000, it’s a good time to have a refreshed look at used vehicles,” Arnold said. “Vehicle quality from the factory has greatly improved in recent years and that is carrying over to the used vehicle market. Yet, there are still several common-sense steps consumers should take before purchasing.”
Some difference-makers that can increase the likelihood of a consumer buying used instead of new, according to the survey: higher quality used car (40%), OEM or dealer certification (39%), detailed maintenance/repair history (36%) and service contract extending warranty or covering major repairs (34%).
Nick Zulovich contributed to this report.