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Consumers Shift Towards Larger Vehicles

By | Published November 2, 2016

An interesting trend has developed in auto sales in 2016. Consumers have begun to shift towards larger vehicles when buying new cars this year. If we look into the numbers it is actually a pretty substantial move in the market.

Data Through September

The most recent data that we can look at shows sales through the end of September. When compared to 2015, overall sales are up approximately 0.5% for the year. In order to analyze the market trends we have to break down the sales into categories.

The industry breaks down sales data into cars and light-duty trucks. The category of light-duty trucks includes pickups, SUVs, crossovers, full size vans and minivans. The cars category is everything else that is relatively small, has four wheels and four doors.

Through the first nine months of 2016, sales of cars were down 8.2% from 2015 while sales of light-duty trucks were up 7.7%. There were more sales of light-duty trucks than cars in 2015 which explains how these numbers can jibe with the overall 0.5% increase in sales.

Why The Market Has Shifted

Many car buyers are steered towards vehicle size by the price of gas at the time that they are shopping. In general, Americans (especially those that live in the suburbs) would rather have a larger vehicle if all other considerations are relatively equal.

gas station price sign

When gas prices are high, consumers worry about the impact that their vehicle's fuel economy will have on their monthly budget. This worry tends to cause people to start looking for the most fuel efficient vehicle that meets their needs.

When gas prices are low, people tend to get complacent, think the prices will always be low and look for larger, more comfortable vehicles that hold more cargo. They aren't worried about fuel costs eating into their budget so they don't pay much attention to the fuel economy.

Of course, these are just general trends. There are people who will always try to get the most efficient car that meets their needs and other people that will always want a large truck or SUV even if gas was $6.00 per gallon. However, there is a substantial enough number of consumers that are swayed by gas prices that the market clearly shifts based on them.

Gas prices have been trending down over the past year or two and this is leading to more consumers purchasing larger vehicles. This trend is likely to continue until there is a sustained period of increasing fuel prices.

How to Take Advantage of Market Shifts

At CarBuyingTips.com, our goal is always to help you get the best possible deal when you buy a car. We are always looking for ways that you can take advantage of market conditions to save yourself a bundle of cash. We think there is a great opportunity for you happening right now.

Since people are tending to buy larger vehicles right now, that means that dealers are having more issues selling smaller vehicles. Therefore, you should shop for a smaller vehicle if you want to drive the price down as low as possible.

gas pump

Obviously, if you have three kids, you can't buy a two seater but you should find a smaller model that is large enough for your needs. Simple economics of supply and demand are at work here. You have something else working to your advantage right now as well. We are getting towards the end of the year and the 2017 models are starting to hit the lots.

These new arrivals mean that the dealerships are extra motivated to move their remaining 2016 models in inventory. If you shop for a smaller 2016 model, you will be multiplying your negotiating power. Just by being a little bit flexible in vehicle size and model year, you can save yourself thousands of dollars.

The strategies that we lay out in our new car buying guide will work even better in this situation. Make sure that after you negotiate a great price that you pay attention to all other aspects of the deal. If you let the dealer screw you on trade in value, overpay for needless extras or pay too high of an interest rate you will have wasted your time negotiating the price. You want to get a great deal and there are multiple parts to a car deal.

It is important to get multiple dealerships competing with each other for your business. If you don't have somewhere else to go, you don't have enough leverage in the negotiation. We recommend that you start by visiting TrueCar. You can see what other people in your area are paying for the car you are looking at. The guaranteed price certificate that they offer is great to use a ceiling in your price negotiations. Bring more dealerships into the fold using reputable, high quality sites like CarClearanceDeals and Edmunds.

Using our tips and strategies, combined with current market condition will make you an expert negotiator and allow you to save thousands of dollars off of MSRP. Let us know how you did in the blog comments.

Author Lyle Romer

About The Author: Lyle Romer is a consumer advocate, Founding Contributor and Vice President of CarBuyingTips.com. For over 17 years, he's been researching all aspects of the automotive sales industry. The findings of his research are incorporated into the main content on CarBuyingTips.com. He has been an auto industry insider since 1999. Lyle also has worked with other automotive websites to help improve their offerings based upon feedback from CarBuyingTips.com users. He can be found on Google+.

Connect with the author via: Email | Google+

CarBuyingTips.com has affiliate referral relationships with multiple web sites. This means that for many of the links you see on this site, we are paid referral fees for leads generated from visitors that click on links or fill out forms on this site. In some cases we are paid a commission for a purchase made on a site that is linked to from CarBuyingTips.com. Please view our advertising policy page for more information.