Canadian Black Book recently released the results from its annual car buying study, conducted by Ipsos. The study looks at the differences between various Canadian demographics in regards to how consumers shop, expect and the overall knowledge gaps that exist when it comes to vehicle shopping, buying and ownership.
Vehicle ownership (or leasing) as a primary example, demonstrates a wide gap, where 48 per cent of those 18 to 34 years old surveyed own or lease, while 77 per cent of those 55 plus do. Nationally across all demos, the survey suggests that 47 per cent of the vehicle owning population is ready to buy a new vehicle in the next 24 months (down four points from last year). The group most likely to buy in that timeframe are those aged 35-54 at 53 per cent; those 18-34 sit at 51 per cent; and the oldest group is much less likely at 37 per cent.
One explanation to the ownership (and leasing) and intentions to buy numbers by age group, is reflected in the growing trend to rely on ride sharing. Twelve per cent of respondents in total, said they rely on this evolving service. More than double that number (27 per cent) are in the youngest age category, compared to nine per cent of those 35-54 and only four per cent in the 55 plus age range.
29 per cent of respondents were likely to purchase a vehicle fully online, without going into a dealership, with Males being much more likely than females to do so (36 per cent vs. 24 per cent). The most probable demographic to conduct end-to-end online vehicle purchases are the youngest (18-34) at 43 per cent, where 30 per cent of those 35-54 would and the 55 plus group are least likely at just 16 per cent.
“As we dissect this research we are finding some very telling statistics that we monitor from year to year, which help us understand developing trends and allow us to offer this information to the auto industry in Canada,” says Brad Rome, President at Canadian Black Book.
Also, when asked ‘how likely are you to reduce the number of vehicles in your household over the next two years’ two in ten Canadians said they would be likely to do so. When asked the same question, 35 per cent of the younger generation responded to be likely; while 19 per cent were likely in the middle age group; and only 12 per cent of those over 55 were likely.
As for other online car shopping tools, specifically trade-in value calculators, surprisingly older Canadians are more likely to use these tools to research values at 65 per cent of those 55 and older, compared to 55 per cent of the 18-34 age group. At trade-in time, only 21 per cent of younger car buyers had a good idea of the value of their vehicle, while of those over 55 40 per cent suggest they had good knowledge of what their trade-in was worth. Sufficed to say, the older generation (55 plus) are far more likely to have traded-in a vehicle at 63 per cent of those respondents compared to only 29 per cent of those youngest group.
“This directly correlates to experience in the market and why the industry needs to treat these consumers differently, in how they market, sell and service them along the ownership journey,” says Brian Murphy, VP Research and Editorial at Canadian Black Book.
Gender and age also bear some major discrepancies as it relates to the acceptance of alternate energy vehicles. If fuel prices were to increase $0.25, males are more likely to consider an alternate energy vehicle at 58 per cent, while only 38 per cent of females would be likely to choose the greener option. The younger a vehicle owner is the more likely they would consider these vehicles, where 58 per cent of those 18-34 would; 48 per cent in the 35-54 age range; and 40 per cent of those who are over 55 would.
When it comes to financing, younger vehicle owners are more likely to hold a loan at 32 per cent of those 18-34, 37 per cent of those 35 to 54 and only 23 per cent of those over 55. From a gender perspective, 34 per cent of males hold auto loans compared to 28 per cent of females.
As expected income range and level of education directly influences the purchase decision of whether to buy new or used. 65 per cent of those with university educations and the same number of those in a household making over $100k per year, buy new vehicles. Conversely, only 36 per cent of those surveyed in households making less than $40k annually, intend to buy new. In terms of gender, six in ten (60 per cent) males are likely to buy new versus 52 per cent of females.
“Many of these trends might be what you would expect to see, however, seeing the actual numbers could serve as an eye opener and help determine strategies for OEMs and dealers moving forwards,” Murphy adds.