Auto Loans, New Car Incentives are Topics of Survey by Kelley Blue Book

Car shoppers have felt the effects of the recession and the way they purchase their next vehicle will be greatly influenced by the current economy, according to‘s latest Market Intelligence survey.

The survey found that 74 percent of respondents said they plan to buy a vehicle within the next six months, which is a positive sign for the economy. Sixty-seven percent said they want a used car and 33 percent want a new car.

Instead of taking out an auto loan or lease, 42 percent of used car shoppers and 20 percent of new car shoppers said they plan to pay cash for the entire cost of their next vehicle. Are consumers reverting back to the time when people saved and saved until they had enough money to pay cash?

Although expensive luxury vehicle sales are up recently, the price point half of new car shoppers want to stay at is $25,000 or less, while 62 percent of used car shoppers only want to spend less than $15,000.

2009 Ford Focus

Instead of taking out an auto loan to buy a used car like this 2009 Ford Focus, more shoppers say they will pay cash.

"In-market car shoppers are taking a decidedly conservative approach to car buying right now, which we think can be directly attributed to low consumer confidence in the current economy," said James Bell, executive market analyst for Kelley Blue Book’s, in a statement. "It seems people are re-assessing their financial situations and deciding to spend less, buy used and pay more often with cash. Incentives have loosened their tight grip on the American consumer, with more people deciding to purchase what they can truly afford versus what they can get with over-extended credit lines and incentive offers on the hood from manufacturers."

The automakers’ and dealers’ television ads that constantly push incentives like 0 percent financing, cash back rebates and low lease payments seem to have little effect on car shoppers, according to’s survey. Eighty-two percent of used car shoppers and 51 percent of new car shoppers said that incentives have no effect on when they buy a car. Also, 81 percent of used and 48 percent of new car shoppers said that the availability of incentives have no effect on the make or model choice.

So what auto loan incentives do shoppers like? found that 0 percent financing was the most popular, followed by low monthly payments. The length of the car loan that shoppers prefer is 60 months, followed in order by 36 months, 48 months, 72 months and 24 months. also found that car shoppers want to be prepared before they enter the dealer’s finance manager’s office, which is a smart move to save money on the auto loan or lease. Fifty-seven percent said they intend to research vehicle financing options online, and 50 percent plan to get pre-approved for an auto loan through a bank or credit union. Only 34 percent said they plan to get their car loan at the dealership when they buy the vehicle.

Survey respondents (44 percent) said they want to get pre-approval to gain the upper hand in auto loan negotiations, and 34 percent said it was to get a lower interest rate. On the other hand, 54 percent said it was convenient to obtain their auto loan at the dealership, and 32 percent said they preferred going through the dealership to get a low auto loan rate.

Kelley Blue Book’s data was based on a survey of 338 in-market car shoppers on from June 18 to 21, 2010.