Survey shows consumers are holding off on buying a new car

Nearly half the respondents to the 2009 Consumer Reports Car Brand Perceptions Survey reported that they have delayed the purchase of a new vehicle. This trend is also reflected in the marked decrease in national auto sales, tallying millions fewer new vehicles bought in 2008 than in prior years.

The leading reasons for the delayed purchase are:

• The existing vehicle is still in good shape (39 percent)
• Vehicles have become too expensive (30 percent)
• General concern for the weak economy (30 percent)
• Waiting for fuel-saving technologies, like hybrid powertrains, to become more affordable (18 percent)
• Interest rates for vehicle financing are too high (18 percent)
• Vehicle financing too difficult to obtain (13 percent)
• Concerned about losing job (11 percent)
• Concerned that the brand may go bankrupt (9 percent)

Car owners are clearly considering the real costs and risks in buying a new model, emphasizing needs over wants. This is more apparent in lower-income households, where interest rates being too high (27 percent) and difficulty in obtaining financing is an issue (24 percent) are limiting purchases. In contrast, households with an annual income over $50,000 did not face the same challenges with interest rates being too high (12 percent) and difficulty in obtaining financing (8 percent).

The changing reality for consumers is impacting their behavior, with both true limitations and concerns for economic uncertainty leading them to hold on to their current cars. As we have seen in our Reliability analysis, cars in general have been improving over time, making it feasible to see vehicles last 150,000 miles and longer with proper, routine maintenance. (Read "Make your car last 200,000 miles.")

As people look to curb costs, holding on to a reliable car for an extra year can make a big difference in the long run. For those who can’t, or won’t, wait, there are attractive deals available on new cars. And, as always, savings can be found in shopping for a used car.

For a detailed look at new vs used cars, read "Used car savings for savvy shoppers."

—Jeff Bartlett