Economic News
Millions of Americans Expecting to Purchase Vehicles This Labor Day
Like many American holidays, Labor Day is often tied to various sales at numerous retailers. In particular, the September date has long been associated with auto sales as dealerships look to offload the current year models ahead of new arrivals. Sure enough, a survey from the personal finance site WalletHub finds that a large number of consumers will be looking to buy vehicles this holiday weekend.
Extrapolating the survey’s findings, approximately 87 million Americans will be looking to purchase a vehicle this Labor Day weekend. That’s up significantly from the 77.5 million consumers who were on the hunt for cars during the same holiday weekend in 2019. What’s more, 55% of respondents report feeling more financially secure buying a car now than they did pre-pandemic.
As for what consumers will be looking for in a new vehicle, 58% stated that they’d prefer to buy an American-made car. However, other factors may play a larger role in their ultimate buying decision. On that note, one-quarter of respondents said that the vehicle’s total price was the most important factor when choosing what car to buy. This was followed fairly closely by the monthly payment amount, which was cited by 21% of those surveyed. Notably, these results are reversed from 2019 when 28% of respondents named monthly payments as their top factor compared to 24% who selected total price. Elsewhere, big influences on buying decisions included the specific make and model (19%), maintenance costs (12%), driving performance (12%), and fuel efficiency (11%).
Of course, while Labor Day sales may be enticing, buying a vehicle is not a decision to be taken lightly. Thus, 64% of those surveyed say they do at least five hours of research before buying. That research includes looking at vehicle reviews, which 55% of respondents cited as their biggest car-buying influence. Recommendations from friends and family were also found to be a major factor, with one-quarter of consumers naming this influence as their top pick. Meanwhile, 18% said dealership experiences impacted their decision the most and a mere 2% said commercials played the largest role in their final choice.
Commenting on the results of this year’s survey, WalletHub analysts Jill Gonzalez stated, “Americans are very interested in buying cars this Labor Day weekend, as 23% more people will look at cars this year compared to 2019. This is great news for car manufacturers and sellers, because car prices are currently at an all-time high and these companies stand to make large profits.” Gonzalez went on to note the larger economic implications the survey suggests, explaining, “Interest in buying cars is also a good indicator of consumer confidence because it shows that a growing number of people feel financially stable enough to make big purchases.”
While this survey suggests that car sales could be robust this weekend, there’s obviously a world of difference between looking for cars and actually buying one. Nevertheless, as Gonzalez notes, it is encouraging that a number of those surveyed are feeling confident about their finances. It’s also interesting that a greater number of consumers are focusing on the total cost of the vehicle as opposed to monthly payments as this may suggest that more buyers are paying cash or are at least taking a closer look at how much they’ll ultimately be spending. Hopefully these are all trends that will continue well beyond this long weekend.
