An exploration of factors influencing car purchasing decisions

Abstract

Purpose – The automobile industry is a key contributor to the GDP in most developed countries. Whilst studies have mainly focused on new car markets, this research aims to investigate how consumers' socio-demographic profile impacts on the decision to buy used or new cars across different automobile segments. Design/methodology/approach – The study focuses on a major car market in Europe, France. The data were obtained from the French Institute of Statistics (INSEE), consisting of a representative sample of 1,967 French households who bought a new or used car within a year of this study. The paper is based on random utility theory and applies multinomial logit modeling. Findings – The findings suggest that economic, individual, household characteristics impact on car segment choice, as well as the decision of whether to buy a new or a used car. Originality/value – This is one of the few studies investigating the demand for new and used cars in conjunction across car segments in a European context. It provides important insights into consumer choice in a mature market.