Consumer behavior is rapidly changing and influencing the auto industry. Understanding what is happening with consumers, as well as the auto industry trends as a whole, is key to making smart financial decisions.
For starters, the buying process is a key concern to consumers. Studies have shown that 54% of consumers would buy from dealerships with a preferred experience, even if the dealership does not have the lowest price. Additionally, 72% of consumers would visit dealerships more often if the buying process was improved. Additionally, most buyers prefer a combination of in-dealership and online purchasing.
In terms of consumer finances, debt for auto loans and leases has risen almost 15% in the last 10 years. Currently, the total outstanding balances for auto loans and leases add up to $1.7 trillion. Auto debt is now higher than student loans.
These increasing financial pressures are leading to fewer auto purchases. In fact, auto loan and lease originations dropped 1.6% YoY in September 2024. Another reason for the drop in car sales is due to increased prices and interest rates.
Buying a car is a big decision, and consumer patterns change over time in step with industry trends and the general economy. Currently, consumers are preoccupied with the buying process, and many consumers struggle with debt and high prices. This is useful information to know, as it can help dealerships navigate a changing industry and customer base.
