THE state of the family budget is playing a major role in shaping just how much people are prepared to pay for a new car these days, according to Carsales’ most recent Consumer Sentiment Survey.

Referring to the survey, Carsales EGM – marketing, content & customer, Rafael Constantinou said in a statement: “Nearly half of all car buyers surveyed told us they’ve had to adjust their budgets due to cost-of-living pressures.” 

He added that the recent drop in fuel prices could be having a positive impact on the new vehicle market with fewer people saying that rising fuel prices are influencing their car purchase decisions.

It is the “first time in 18 months” that fewer buyers were adjusting their buying decision on the basis of high fuel prices.

Mr Constantinou said that across the industry “we’re seeing consumer confidence start to rise again”.

Carsales says the survey seeks to get into the headspace of both buyers and sellers in the auto category, as well as first car buyers.

Rafael Constantinou

Meanwhile he reported that consideration periods are lengthening which, he said, highlighted the need for detailed, transparent information to help consumers make informed decisions. 

He said that the survey showed that brand loyalty continues to decline, particularly among younger buyers, “reinforcing the importance of brands connecting with audiences in meaningful ways”.

Key findings:

Buyer insights:

• Consideration periods are lengthening: car buyers are less likely to be ready to buy a car immediately compared to last year. More than a third (39 per cent) are now looking to buy a car in more than a months’ time which is a shift compared to the year prior (29 per cent).Women are more likely to be ready to ‘buy now’ (33 per cent compared to 24 per cent of men). Men are much more likely to browse for their new car for over a month (47 per cent compared to 35 per cent of females)
• SUVs are the most popular cars on Carsales (35 per cent), with women significantly more likely to be looking at this vehicle type (46 per cent) than men (32 per cent). Enviro-conscious Gen Z’s are more likely to prefer a sedan (26 per cent) or hatch (23 per cent) over an SUV (20 per cent).
• Despite cost of living concerns, quality trumps price as top priority: for the majority (65 per cent), quality and reliability is the biggest concern when buying a car. New car buyers are often also concerned about affordability and availability within a reasonable timeframe. For used car purchasers, transparency on the vehicle’s history ranks above price. 
• Brand loyalty is decreasing: only 19 per cent of current buyers are committed to sticking with their current car brand, however 

Toyota drivers are the most loyal with 37 per cent saying they would stay with the same brand for their next car compared to Hyundai at 5 per cent and Mitsubishi at 9 per cent. 

Gen Z are the least loyal generation, with only 11 per cent saying they’d stick with the same brand for their next car

Seller insights:

• Financial considerations have decreased: although sale price is still the most important thing for sellers (at 56 per cent) it has reduced in importance since 12 months ago (65 per cent).
• The five year itch: 61 per cent of respondents keep their car for at least five years before selling. The key motivator to selling is upgrading to a new or better car model.
  

First car buyer insights:

• First car buyers are more likely to only be considering used cars (65 per cent) than non first car buyers (59 per cent). 
• For non-first car buyers, quality and reliability are of similar importance to price, however for first time buyers price is significantly the most important factor in purchase consideration. 87 per cent of first car buyers consider this to be the most important consideration when purchasing (vs 71 per cent average).
• First car buyers are significantly more likely to be spending under $30k (86 per cent) than non-first car buyers (47 per cent).
• Gen Z first car buyers are significantly more confident in buying a car unassisted (43 per cent) compared to millennials (23 per cent).