The car shopping experts at Edmunds conducted an in-depth analysis of transaction and finance data…
The car shopping experts at Edmunds conducted an in-depth analysis of transaction and finance data to rank all 50 states on responsible car shopping behavior.
With average transaction prices, loan term lengths and interest rates for new vehicle purchases sustaining highs not seen since before the recession, buying conditions are becoming far less favorable for American car shoppers.
To get a sense of how consumers are adapting to this changing environment, the car shopping experts at Edmunds conducted an in-depth analysis of transaction and finance data to rank all 50 states on responsible car shopping behavior.
Connecticut, Massachusetts, Rhode Island, Michigan and New Jersey lead the country in responsible car shopping behavior; Oklahoma, Mississippi, Alaska, Arkansas and New Mexico bottomed out the list.
Analysts also dug into economic and Edmunds site data to pinpoint exactly why consumers in certain states seemed to be more responsible car buyers.
They learned that the amount of time shoppers spent using car shopping calculators on Edmunds had more of a direct correlation on responsible behavior than any other indicator analysts studied.
According to Edmunds site data, shoppers from the top five ranked states typically spent 55 percent more time on calculators versus shoppers from the bottom five.
What Makes for Responsible Car Buying?
Leveraging insights gleaned from more than 842,000 vehicle transactions between May and September of 2018, Edmunds experts defined “car shopping responsibility” by analyzing four components: the average percentage of trade-ins with negative equity, the average amount owed on negative equity trade-ins, average loan term lengths, and average auto loan interest rates across each state.
Each state was ranked within each individual metric and then given an overall aggregate score.
The highest ranked state, Connecticut, scored top marks across the board in terms of lowest share of trade-ins with negative equity (10 percent), lowest amount owed on trade-ins ($4,500), shortest average loan term lengths (64.2 months) and lowest annual percentage rates (APRs) of 4 percent.
New Mexico ranked lowest in the nation in terms of shopper responsibility due to holding the second-highest share of transactions with a negative equity trade-in (32 percent), the second-highest amount owed on underwater vehicles ($6,600), the second-highest average APR of 7.1 percent, and the highest loan term lengths in the nation at 72.4 months on average.
Find out more at www.edmunds.com.