Matching Affordability with Timing in the Used Car Buying Cycle

By March 31, 2016Car Buying

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Car Shopping; is the time right and what can I afford?

Seasonality plays an important role for the used car shopper. Dealerships need to be on high alert this time of year –  every February, for instance, there is a spike in search interest for “cars for sale” possibly due to people anticipating a big tax return.  Summer is another important seasonal moment. When the temperatures rise, so does the interest in car shopping. Search interest for “lease deals” peaked last Summer, up 20% compared to 2014 according to Google Trends.

Path to Purchase

After a car shopper has decided a purchase path to a “new” or “used” vehicle. The next step is figuring out if they can afford owning it. Whether searching Craigslist online or mobile — list prices and interest for manufacturer’s suggested retail price (MSRP) (the amount of money for which the company that produces the product recommends that it be sold in dealerships) is researched. Another factor is the trade in value of the car shoppers current vehicle. All of these components come into play when deciding if the time is right. According to Google Trends search interest in trade in value was at record levels last Summer—up 17% in July. In fact, they saw more trade in interest than we during the ‘Cash for Clunkers’ major push in 2009.  As of August 2015, more than 50% of these searches were on mobile.

Auto Payment Calculators

Another tool that can be used by potential car shoppers to determine affordability are auto payment calculators. They can help calculate the estimated monthly payments, to stay on budget, when buying your next used vehicle. With auto payment calculators enter the vehicle price, down payment, trade-in value, sales tax, interest rate and term to determine your monthly payment. Once you have calculated, determine if you have the money for repairs, maintenance, gas, insurance, plates, taxes, registration, and all the other costs of owning a car. Purchasing a car is only one of the many expenses of owning it.

Do your Research Online

Before setting foot in the dealership there are many things you can research online. Once you have selected a vehicle you can research pricing, reviews, specs, fuel economy and lists of standard features. You can also locate used cars for sale in your area by zipcode, distance, mileage, price and features to find exactly the car you are looking for. You can also research other online classified ads such as Craigslist for used vehicles. Their services may vary but should include car inspections, warranties and return policies. Another important thing to research is the VIN or vehicle history reports. Carfax is a good resource for attaining these reports. These reports can reveal important information about the used car whether it has a salvage title, odometer readings, and any open recalls. These reports can be obtained prior to contacting the used car seller.

Know When the Time is Right

In summary, the path to purchase is roughly a 3 month cycle and can be powered by seasonal trends. Once a car shopper has determined the intent to purchase there are many online resources, including social media, to help make this process easier.

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