January 10

Every Key Insight You Need for Today’s Automotive Industry

Last Updated on January 10, 2024

We conducted a survey of Municibid users’ car buying habits over the past two years and came away with some interesting findings. What we discovered offers keen insight into today’s automotive landscape.

What’s the Buying Trend?

Based on our survey, we’ve broken down into percentages how people are buying vehicles today.

Buying Just One Car

About 37.89% of folks fall into this category. In the last two years, they’ve bought only one car. They’re your everyday consumer who’s looking for a reliable ride that’ll last a while. And given the advice we’ve seen for first-time buyers, a lot of people are thinking long-term and going for more budget-friendly options.

Two to Four Cars – The Popular Choice 

This is where we found 45.26% of respondents. They’re updating their rides more often or have a small business that needs a couple of vehicles. What’s interesting is that the results here tie in with what we’ve seen about people increasing their spending on cars lately. Some are going after those vehicles with new features and some just like the feel of something new every so often.

More Than Five Cars – The Big Buyers 

Surprisingly, about 16.84% of consumers are buying more than five cars in two years. This group includes businesses like auto dealerships and companies with a fleet of cars. They’re a big part of the automotive market, always either updating their stock or expanding their fleet.

What Does This Mean for the Car World?

With these findings in mind, we know for sure that big companies play a huge part in the car market. Their efforts ensure a steady flow of used and new vehicles. Likewise, the automotive market caters to everyone. From new to used, from cars to trucks, there’s a little something for all.

How people buy also tells us about the economy. If someone’s buying just one car, perhaps they’re being careful with their budget. When people aren’t spending at all, the market’s probably in bad shape. When people are buying lots of cars, that means the industry’s doing pretty well.

Price Range Preferences Across Vehicle Types

In addition to buying trends, this recent survey on Municibid users provides intriguing insights into vehicle price range preferences. There’s diversity in vehicle types, including heavy-duty trucks, which gives us a nuanced understanding of the market dynamics within this platform. Let’s look at a detailed breakdown of the findings.

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Budget-Friendly Vehicles ($0-9,999)

About 60% of respondents prefer vehicles in the more affordable price range. While this includes budget-conscious buyers looking for economical options, note that within Municibid, this also includes smaller vehicles and older models of heavy equipment and trucks that fall into this category.

“Living in upstate New York means being prepared for the winter! I decided to look for an SUV, but soon found that due to recent events that simple goal seemed unattainable with skyrocketing prices.”

Matteo vehicle image

“Decided to look on Municibid and wound up purchasing a 2011 Ford Expedition SSV that had definitely seen a lot of service, but was in my price range. Despite being both a police car and animal control vehicle, it cleaned up nicely! With a few appearance mods, I wound up falling in love with it. Serving as my work vehicle, it has gone an additional 50,000 miles so far and rips through any weather conditions and terrain with ease. I couldn’t be happier.”

– Matteo

Mid-Range Vehicles ($10,000-30,000)

Approximately 34.74% of users are interested in vehicles within this range. Represented are a mix of newer personal vehicles and used commercial vehicles. That includes older or mid-range heavy-duty trucks and equipment. It’s kind of like the sweet spot for both regular drivers and smaller businesses.

Premium Vehicles ($30,000+) 

A smaller, yet significant portion of about 5.26% of respondents leans towards the newer cars and trucks. They’re looking for the most recent models of heavy-duty trucks and equipment. Money is less of a concern, and they’re prioritizing top-notch quality and performance.

Market Implications for Municibid

From personal cars to heavy-duty commercial trucks, Municibid caters to a wide array of buyers, each with varying requirements and budget considerations. Given the price range results, this benefits the diverse vehicle needs among users. While there’s a significant lean towards budget-friendly options, the interest in mid-range and premium segments is notable, highlighting a market for both standard consumer vehicles and more expensive commercial vehicles. 

“Ever since I can remember I would always enjoy helping my father with small excavation jobs. And it was always a dream of mine to pursue the same work he did. Starting out small with my father’s help with lending me one of his machines I started to take on some small jobs of my own.”

Alex vehicle image
Alex vehicle image 2

“In September of 2019 I was able to purchase an International dump truck from Municibid. This truck has really helped me tackle the excavation jobs that come my way and has been a very useful piece of equipment.”

– Alex

“I have resuscitated a former ambulance and brought it back to life as a motor home that we affectionately call the ‘campulance.’ I have no prior experience with conversions and it has proven no easy feat, but I have enjoyed the lengthy process, and more so next spring/summer when we hope to take the kids camping.”

– Ethan

How the Automotive Landscape is Shaping Consumer Experience

Considering what we’ve discussed so far, the survey points to several ways the automotive market is impacting people and will likely impact your future purchases.

The Hunt for Quality Used Cars

One thing that’s come up in recent years is how tough it’s getting to find a worthwhile used vehicle. And guess what? They’re getting pricier too. Back in 2020, companies cut vehicle production to match a decreased need. Many people were facing lockdown restrictions and worked from home. Adding to the issue were cuts in various national supply chains with mass lay-offs.

With less use for cars and less models being made, prices fell. However, sales began to rocket post-pandemic. The renewed demand exceeded production capability. As a result, new cars and used ones, started to cost, and still cost an arm and a leg. Less new vehicles meant less models entering the used car market.

Many buyers paid above the manufacturer’s suggested retail price (MSRP) during the shortage and for vehicles that weren’t worth much. While companies recouped their losses, they also met the high consumer demand. 

Pricey Insurance Costs

Aside from the rising cost of cars, the same has been true for insurance. This explains why some people have stuck to a single vehicle purchase or been particular about the price ranges they’re comfortable with.

Different Strokes for Different Folks

While some people are watching their wallets, others, especially those buying cars for personal use, say current costs aren’t really affecting them much. For those in the commercial realm who have or want a host of vehicles, these market ups and downs are a bigger deal. 

What This Means for Sellers in the Car Market

Balancing Act for Quality and Price

Given how people are responding, there’s clearly a need for options that hit that sweet spot between being affordable and good quality in the used car market.

Adapting to the Times

Buyers are getting savvier. They’re more price-conscious now and are thinking long-term, focusing on keeping their current cars in good shape to avoid the hassle of finding and financing a new one. Keeping up with what buyers are looking for, and their concerns, is key to staying on top of the game.

“It seems like there’s decent vehicles for high prices and nice vehicles for crazy prices.”

– Jeffrey

Tips for First-Time Car Buyers

For those entering the market to buy their very first car, we’ve got some great advice from seasoned car buyers. This is a big step, but with these tips and tricks you can make your car buying experience as smooth as your ride.

Let’s unpack the advice that came from our survey:

Do Your Homework

This one’s a biggie! Doing your homework means understanding the market, knowing your vehicle options, and getting a grip on pricing. A lot of folks emphasized the need to really research your choices. There are so many out there, from budget-friendly models to those heavy-duty trucks.

“Buy used, 3-4 years old with average to above average miles on it.”

– James

“Look for as long as it takes.”

– Justo

“Do your homework using all the tools now available for car shopping. Try to buy from an honest, reputable dealer. Try to save as much as possible for down payment. Continue making payments to yourself after the car is paid off. Saving for the next car.”

– Harold

The Value in Pre-Owned

Quite a few people talked about the wisdom of going for an older car that’s still in good shape. This seems like a smart move when you think about how many are looking for vehicles in the lower price ranges. A well-maintained used car can be just as reliable without draining your wallet.

Think Beyond the Price Tag 

There’s more to buying a car than just the upfront cost. Think about the total cost of ownership, including things like insurance and maintenance. You’re investing in getting your ride out of the lot, but also in the car’s longevity. 

“Learn how to work on the vehicle you purchase.”

– Aaron

Get It Checked Out

Another solid piece of advice is to have a mechanic give the vehicle a thorough once-over before you commit. Nobody wants unexpected repair bills down the road. This may seem like a hassle, but it’s a step that’s well worth it for peace of mind.

What This Means for You

Ultimately, you want to find the sweet spot where cost meets quality. There’s no need to overspend, but you also don’t want a car that’s going to let you down. Likewise, taking the time to understand what you’re getting into can save you a lot of headaches later. Remember, buying a car is a long-term commitment. Your purchase in the here and now will also impact your finances down the road.

Comparing Costs: Used vs New

In many instances, the cost of buying a used vehicle can cost less than buying new, even when considering repair costs. Let’s compare the cost of buying a new versus used Ford Explorer.

Initial Purchase Cost

New Ford Explorer: The price for a new base model can range from $32,000 to $55,000, depending on the year and additional features.

Used Ford Explorer (5-15 years old): The price can vary widely, from about $5,000 to $30,000, depending on the vehicle’s condition, mileage, and specific model year.

Financing and Interest Rates

New: Interest rates for new cars range from 2% to 6%, depending on credit score and market conditions.

Used: Interest rates for used cars are typically higher, ranging from 4% to 10%.

Insurance Costs

New: Annual insurance costs can range from $1,200 to $1,800, depending on the driver’s record, location, and coverage levels.

Used: The range here is somewhere between $1,000 to $1,400 annually.

Maintenance and Repair Costs

New: Expect to spend a minimal amount in the first few years, usually under $500 annually.

Used (5-15 years old): For used models, the cost ranges from $500 to $2,000 annually, depending on the vehicle’s condition and age.

Depreciation

New: New cars can lose about 20-30% of their value in the first year and about 50% or more over the next five.

Used: Depreciation for older vehicles is slower, but really depends on the car’s age and condition.

Total Cost of Ownership (over 5 years)

New: Adding up the purchase price, financing, insurance, maintenance, and factoring in depreciation, the total cost can range from $45,000 to $60,000.

Used: Including all the aforementioned factors, the total cost is between $20,000 and $40,000.

Figuring Out Auto Loans

Revisiting the subject of financing, some car buyers take out auto loans to secure their next vehicle. If you’re in this boat, knowing what to look out for when deciding between auto loans can help mitigate risk. This is all the more helpful today as auto loan rates continue to increase

Interest rates dropped between 2019 and the end of 2021, which is in line with decreased car sales during the pandemic. Once things changed, auto loan rates rose and have since kept rising. The lowest value in recent times has been 3.85%, but the rate in November of 2023 was 7.7%!

If you want a year by year example, rates in September of 2021 were 3.97%, followed by 5.16% in September 2022, and then 7.51% in 2023.

Unsurprisingly, the increased interest has resulted in higher rates of increase of auto loan delinquencies.

This report from the Federal Reserve Bank of New York for the second quarter of 2023 provides several key insights into the state of auto loans in the United States.

Growth in Auto Loan Balances 

As reported in the findings, auto loan balances saw an increase of $20 billion. The increase has been part of continuing a trend of growth that began in 2011. This suggests a robust and expanding auto loan market.

More Newly Originated Auto Loans

The total amount of newly originated auto loans was $179 billion. This amount includes leases. Although the number of newly opened loans remains below pre-pandemic levels, the findings indicate a strong demand for auto financing, with a trend towards higher-value loans.

Credit Scores for Auto Loans 

The federal bank discovered a notable shift in the credit scores associated with newly originated auto loans. The median credit score for these loans decreased by 5 points after an increase in the previous quarter. This might suggest a slight easing in lending standards or an increase in loans to borrowers with slightly lower credit scores.

Delinquency Rates

Delinquency rates for auto loans also experienced an increase, with transition rates into delinquency rising by 0.4 percentage points. This is a reversal from the period of extraordinarily low delinquency rates during the pandemic, indicating a return to slightly above pre-pandemic levels.

Overall Debt Context 

In the broader context of household debt, debt balances are now $17.06 trillion. That’s a slight increase from the first quarter of 2023. Auto loans contributed to this rise, alongside increases in other non-housing balances like credit card debts.

Conclusion

There are a number of considerations to make when choosing between a new or used vehicle. New models have benefits that include the latest features and a full warranty. Used models have a higher risk of repairs and lack a warranty, but offer lower initial investment and insurance costs. You have to decide what works best for you, but relying on the tips, tricks, and information provided in this automotive landscape survey is bound to make your car buying, or selling, process much easier.


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