TrueCar

The 115th edition of the Chicago Auto Show concluded last week after a successful 10-day run at McCormick Place that saw a dramatic increase in overall attendance compared to the previous year. More than 300,000 people attended, and the show is already planning to return to McCormick Place in February 2024.

TrueCar’s SVP of Business Development, Alain Nana-Sinkam, talks about auto industry trends, the popularity of EV vehicles and what he’s seeing around the consumer car buying experience.

Q: The Chicago Auto Show brought many different EV innovations to light. According to a recent TruceCar study, most consumers said they are “somewhat” or “extremely likely” to purchase an EV for their next vehicle. Do you have any data relating to the state of Illinois specifically?

A: Our recent surveys found that 25% of in-market shoppers in Illinois are considering EVs, which appears to be in the middle of the pack for state EV interest. States with higher interest included California, Florida, and Arizona. At the moment, interest for EVs in Illinois is tracking slightly higher than states across the Midwest, Northeast and South such as Ohio, Georgia and New Jersey.

Q: There seems to be more EV choices. Can you provide any sort of breakdown on some of the top choices depending on the stage of your life?

A: EV options for car shoppers have certainly expanded over the past decade beyond brands like Tesla, who has been a clear market leader for several years. Over the past year, Ford and Chevrolet have become top brands for EV shoppers. Other notable models shoppers can consider are the Hyundai Ioniq Electric, Chrysler Pacific, Nissan Leaf, or the Toyota Prius.

Though the perception around EV adoption skews toward younger, wealthier, and more educated consumers, the truth is that factors like fuel prices and affordability are driving consideration among a broader set of consumers: 56% of consumers under 40 are considering EVs, but that still leaves a significant 46% of over 40 consumers exploring these vehicles. Also, 54% of EV considerers have a college degree or higher, while 24% have some college education and 21% have a high school education or less.

Q: There will likely be more car purchases this year compared to last year. Many people feel very anxious during the car-buying process. Do you have any tips? How does a consumer know if they are getting a good deal?

A: Since the pandemic, the auto industry has been very volatile, but we have noticed some recovery over the last few months. Some tips we would give to shoppers currently navigating the everchanging market are:

• Understand your budget and what you can reasonably afford, as the average transaction for new cars are around $46,000 up 12% from 2021.
• Explore your options and have an idea of what you want but be flexible. Amid the ongoing inventory shortages, we’re seeing more buyers ditch brand loyalty, with 40% of shoppers saying they’re open to any model that meets their needs.
• There’s an abundance of prices and pricing terms when buying a car, but there’s three main ones to focus on: MSRP (manufacturer suggested retail price), selling price, and invoice price. Resources like TrueCar can help you see what other people in your area paid for similar vehicles, to help you get a jump start on the selling price.
• Act quickly because inventory shortages mean that cars are flying off dealership lots at record speed as demand surges. On average, new cars are available on dealership lots for only 23 days, and while used cars are a little better, they’re only available for 36 days. With that in mind, when you’re going to the dealership, you should go fully prepared to buy.

Q: Can you provide some insight on general consumer purchasing trends, and what consumers want when looking for a new vehicle?

A: The BLS’ Consumer Price Index (CPI) has been falling from its peak in mid-2022 but we anticipate that consumers will still feel the pain of the economy and elevated prices resulting in buyers still being hesitant to make larger purchases like vehicles.

According to our recent study, 54% of in-market shoppers are purchasing based on need versus want. However, as new vehicle inventory continues to recover, we may see more discretionary purchasers re-entering the market. We anticipate the first discretionary shoppers to return will probably be the most affluent, who can either pay cash, or for whom higher monthly payments don’t pose a hardship.

While consumers will still be buying both on and offline, increasingly more of the process will move online. According to our recent TrueCar study, the majority (60%) of shoppers say they are “somewhat” or “very likely” to complete their next vehicle purchase entirely online, so demand for that experience remains strong. Shoppers are particularly interested in setting up more of their deal online, including setting up financing and a trade-in.

In terms of what consumers are looking for, we have a few findings from the end of 2022 that could carry momentum into this year:

• The most searched new car in 2022 was the Ford Maverick. Consumers seem to be dazzled by everything new the Maverick has to offer: a city-sized truck powered by a hybrid engine that starts under $20,000.
• On the used side, the most searched used car in 2022 was the Dodge Charger. The Charger has ridden on essentially the same platform since its reintroduction, which makes sense why shoppers may consider a lower-priced, older option.
• Although the Charger was the most-searched used vehicle, the most purchased used vehicle was the Ford F-150, which has been America’s top-selling truck countless times and an ever-popular choice for both personal and work vehicles.