Buyers Getting Smarter, But Still Unprepared, Says New Study
Consumer are more cautious about spending and are conducting more research before making major purchases in the wake of the economic downturn, but a new study reveals that they still have a lot to learn.
McLEAN, Va. — Consumer are more cautious about spending and are conducting more research before making major purchases in the wake of the economic downturn, but a new study reveals that they still have a lot to learn.
In its seventh year, Capital One’s Rule of the Road survey found that 70 percent of first-time car buyers surveyed did their research, compared prices and various makes and models before making a final decision to purchase their car. Fifty-three percent of first-time car buyers who responded to the survey also developed a budget to help them determine what they could afford and how they would make payments or manage their monthly expenses. And of those who set a budget, 88 percent said they stuck to it when they purchased their vehicle.
The study was conducted between May 13 to 19 by Braun Research, a Princeton, N.J.-based opinion research firm, which interviewed 700 U.S. residents ages 18 and over. It pointed out that despite first-time car buyers conducting more research before a purchase, these buyers are still having trouble factoring in long-term secondary costs of vehicle ownership.
More than half (63 percent) of those surveyed thought they accurately calculated the true cost and expenses of buying a vehicle, yet nearly half of respondents say they did not factor in their calculations the cost of maintenance and repairs (47 percent) or registration and parking (45 percent). Of those surveyed who got a loan to purchase their car, nearly half (48 percent) do not know the interest rate. And of the 61 percent who researched different models and types of vehicles before making their purchase, only one-third of respondents said they checked their credit score.
In terms of financing options, the survey found that most first-time car buyers were uneducated in this area, with most (59 percent) reporting that they had not had anyone discuss financing options with them and how auto financing works. Before purchasing their vehicle, more than half (54 percent) of those surveyed did not know that you could go online to compare financing options, while 57 percent of respondents did not know that you could go online to apply for a loan for a new vehicle. Only 20 percent researched financing options online and 18 percent went online to research different lenders.
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