August was the fourth straight month of slowing new-vehicle sales. The global chip shortage is the main culprit as the resulting dearth of inventory pushes prices to record highs.
A second round of consumer research conducted by Kelley Blue Book finds that nearly half of car shoppers are exiting the market and delaying their purchase for the next several months due to the chip shortage. The percentage of shoppers likely to postpone their purchase increased to 48% from 37% reported in the initial study results published in May. When asked how long they would wait, the percentage of shoppers indicating they would wait between three and 12 months increased to 80% from 60% in May.
likely to postpone
would travel up to
200 miles to purchase
would buy used
instead of new
“With a large portion of the in-market population now saying they plan to delay their purchase given the current market conditions, it will be interesting to see how that could impact the ongoing delicate balance of supply, demand and pricing across the industry,” said Vanessa Ton, senior industry intelligence manager for Kelley Blue Book.
Here are four takeaways from the recent research, which was conducted in late August. In-market shoppers are consumers intending to purchase within a year.
1. Many in-market car shoppers are likely to postpone their purchases due to the chip shortage.
- 48% said they are likely to wait to purchase a new vehicle, and the majority of those shoppers plan to wait three months or longer, up from 37% in May.
- 40% said they would wait seven months or longer, 40% said three-to-six months, and 12% said one-to-two months.
2. Shoppers who do not plan to postpone understand that they may need to make some changes to their plans to be able to purchase a vehicle sooner rather than later.
- 25% said they would consider switching brands.
- 19% said they would consider changing vehicle categories, unchanged from May.
- 18% said they would consider shifting from purchasing new to used, down from 23% in May.
3. Many in-market car shoppers are willing to travel outside their local area to purchase a new vehicle, and a substantial number of shoppers say they are willing to pay above the manufacturer’s suggested retail price (MSRP).
- 75% said they are willing to drive outside of their local area for a vehicle with most shoppers willing to drive between 50-200 miles.
- 35% said they would pay up to 13% above MSRP (or roughly $5,600 more based on the latest Kelley Blue Book average transaction prices), down from the 42% in May that said they would be willing to pay more than MSRP.
4. Among all in-market shoppers surveyed, many say they are willing to make some changes to their vehicle purchase plans due to the chip shortage.
- 38% said they would shift from purchasing a new vehicle to a used vehicle, up from 23% in May.
- 35% said they would shift from an import to a domestic brand.
- 32% said they would switch brands.
If you would like to learn more or speak to one of the experts from Cox Automotive, reach out to the Cox Automotive PR team.