- Car Dealership Guy News
- Posts
- Why car buyers are maxing out their budgets
Why car buyers are maxing out their budgets
Colin Velez
August 27, 2024
Car buyers are hitting the ceiling of their budgets, but they’re not shying away from paying more for the right vehicle.
Driving the news: New research from CDK Global found that most car buyers are willing to pay the maximum price their budgets allow.
93% of consumers said they had set a budget for their recent vehicle purchase.
Of those buyers, 57% admitted to buying a car on the upper end of their budget.
Only 36% and 7% said they purchased on the lower end or exceeded their budget, respectively.
Why it matters: Given elevated vehicle prices and interest rates, a base model already carries a relatively high monthly payment. If consumers want bells and whistles, they have to stretch their budgets even further. More consumers are willing to do this because of growing confidence in the economy. On top of that, vehicle affordability is very slowly creeping its way back into the economy.
Zoom out: Still, there were key differences between different kinds of car shoppers.
Gen Z and Millennial buyers, who generally have less disposable income than older generations, were more likely to stay under budget.
The more flexible the customer is with their spending, the less likely they are to share their budget with a salesperson.
37% of shoppers who did not mention budgeting were flexible, compared to 35% who gave their salesperson a price range.
Bottom line: As buyers push their budgets to the limit, it’s clear that the right vehicle with the right features is worth the extra cost. For dealers, this means the opportunity lies in understanding that while shoppers are price-sensitive, they’re also willing to spend more for value.
Become an automotive insider in just 5 minutes.
Get the weekly email that delivers transparent insights into the car market.
Join 74,000 others now, it's free:
Connecting world-class talent with top-notch companies in Automotive.
Great career opportunities are hard to find. We make it easier. Search through open roles or submit your resume confidentially on the CDG Jobs Board. Best part? It’s 100% free.
Here are some standouts for anyone looking for their next move.
Elk Grove Subaru is looking for an internet sales associate near Elk Grove, CA.
Ron Marhofer needs to fill three dealership positions including sales, BDC, and F&I.
Veros Credit is hiring 10 regional sales managers all across the country.
Looking to hire? Add your roles today—it’s 100% free.
Reply