CarGurus Regional Price Study - Consumers Save Up to 11% by Shopping Outside Local Markets for Pre-Owned Cars
Pickup trucks cheapest in the Southeast and Western regions.
Sedans cheapest in the Northeast region.
CAMBRIDGE, Mass., Dec. 13, 2010 -- CarGurus (http://www.cargurus.com/), a leading online automotive community, today announced the findings of its pre-owned automotive regional pricing study. Based on the price analysis of the highest selling models in four geographic regions across the United States, the study found that consumers can save as much as 11% by shopping in regions outside their local market. The average regional price disparity between the highest and lowest priced regions was 7% for pickup trucks and 5% for sedans. Pickups were consistently least expensive in the Southeast and Western regions, and sedans were cheapest in the Northeast.
Don't Always Shop Local
While usually thought of as a “local” shopping experience, buying a pre-owned car/truck should be seen as more of a nationwide shopping endeavor. With pickup trucks having a regional price discount as high as 7% in the Southeast and West, consumers in the Northeast and Midwest should look outside their local markets when shopping for these types of cars. For example, the absolute savings for a consumer from the Northeast buying a popular Dodge Ram Pickup in the Southeast can be as high as $2,300. With savings like this, consumers can afford to fly out to that region or have the car shipped to their local market. Prior to committing to the purchase, consumers can have a local market mechanic review the car.
Supply/Demand Drives Price Discounts
With the Northeast being prone to snow, ice and the ample use of salt on the roads, cars are often subject to a perceived “rust belt” price penalty. In this study, sedans followed this pattern. On average sedans from the Northeast region had a 5% regional price disparity from the more expensive regions of the country. The sedan with the greatest regional price disparity was the Honda Civic with a 6% regional price discount.
In contrast, pickup trucks were least expensive in the Southeast and Western regions. Given the popularity of these vehicles in those regions this discount might be a function of oversupply in those markets. The pickup with the greatest regional price disparity was the Dodge Ram 1500 with a regional price discount of 11%.
|Body Style||Price Disparity Between Highest
and Lowest Regional Price
|Region with Lowest
|Model with Greatest
|Pickups||7%||Southeast, West||Ram 1500
|The average price disparity between highest and lowest regional price
for the 15 best-selling vehicles was 5%.
"Traditionally buying a car has been a local market phenomenon. However, with the advent of the internet and the price transparency that it brings, consumers are now able to look at other geographic markets," remarked Langley Steinert CEO/Founder of CarGurus. "Unlike new cars where the price is the same nationwide, pre-owned cars represent a more fluid market. Prices can and do fluctuate quite a bit across geographic regions. With regional price disparities as high as 11%, consumers are indeed incented to buy cars in non-local markets."
CarGurus examined the average listing price for the top 15 most popular cars in the United States across four regional markets (Northeast, Southeast, Midwest, West). Cars between the years 2005 and 2009 were examined to derive an average listing price for each geographic market. Pricing for each regional market was then compared to determine the regional price disparity for each of the popular cars in the study.
About CarGurus LLC
Located in Harvard Square, Cambridge MA, CarGurus LLC is an online automotive community founded by Langley Steinert, formerly Chairman and co-founder TripAdvisor LLC. CarGurus' founders, board, and investors bring a wealth of experience from such leading web companies as TripAdvisor, eBay, Expedia, and Yahoo. For more information about CarGurus visit us at www.cargurus.com.Amy Mueller