IRVINE, Calif. – Consumers are expected to remain conservative in today’s still struggling economy, with most in-market shoppers expected to spend a relatively small amount of money on their next vehicle purchase, according to a recent survey. In fact, most respondents said they are more like to buy used vs. new.

The expectations highlighted in Kelley Blue Book’s latest Market Intelligence survey also point to a challenging time for F&I departments, with more than one-third of respondents indicating that they plan to pay the entire cost of their next vehicle purchase in cash. Incentives, according to the survey, aren’t having much influence, either.

The study, which surveyed 338 in-market car shoppers on kbb.com from June 18-21, also showed that nearly three-quarter of those surveyed plan on purchasing within the next six months, with a majority of consumers (67 percent) saying they are more interested in a used vehicle than a new one (33 percent). In addition, 42 percent of used-car shoppers and 20 percent of new-car shoppers said they plan to pay the entire cost of their next vehicle in 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 kbb.com. “It seems people are re-assessing their financial situations and deciding to spend less, buy used and pay more often with cash.”

Most used-car shoppers (62 percent), according to the study, said they plan to spend less than $15,000 on their next vehicle purchase, while half of new-car shoppers (50 percent) said they plan to spend $25,000 or less on their next vehicle purchase.

Additionally, a majority (82 percent) of used-car shoppers and more than half (51 percent) of new-car shoppers said that incentive offers have no effect on the timing of their next vehicle purchase. In addition, 81 percent of used-car shoppers and 48 percent of new-car shoppers said that the availability of incentives have no effect on their specific vehicle choice (make/model).

And of those who intend to finance their next vehicle purchase, zero-percent financing was listed as the most appealing incentive offer at 30 percent, followed by low monthly payments at 21 percent. In addition, women were twice as likely to find low monthly payments the most appealing incentive offer when compared to men (32 percent of women vs. 16 percent of men).

“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,” added Bell.

By far, the most popular loan term was 60 months, with 42 percent of respondents indicating they prefer to finance over five years. The second most popular term was 36 months at 21 percent, followed by 48 months at 20 percent. Only 11 percent preferred 72 months, and just five percent cited 24 months.

Researching before buying is also expected to pick up, with 57 percent of respondents indicating that they intend to research vehicle financing options online. Fifty percent of respondents said they plan to obtain pre-approval through a bank or credit union, while only 34 percent indicating that they plan to obtain financing at the dealership at the time of purchase.

Shoppers also cited control in negotiations as the top motivator (44 percent) behind financing through a bank or credit union, followed by low interest rate (34 percent). Shoppers, however, did acknowledge the convenience of in-dealership financing, with 54 percent of those surveyed saying it is the primary motivator behind financing at the dealership, followed by low interest rate (32 percent).

According to the survey, the average shopper has three vehicles in his or her consideration set and 83 percent of all survey respondents said they are still undecided on the make and model of their next vehicle. Younger car shoppers (age 34 and under) are more open to buying either a domestic or import brand (45 percent), compared with shoppers age 55-plus who are more likely to have decided upon either a domestic brand (39 percent) or an import brand (32 percent).

Among both new- and used-car shoppers, price and durability, reliability and quality tied at 33 percent as the top two deciding factors when considering a vehicle to purchase. The next-highest deciding factor was past experience with the brand, rated at 12 percent.

Shoppers also indicated that negotiating remains a crucial part of the car-buying process, with 62 percent indicating that they prefer negotiating to having a single set price. That number increases more among younger car buyers when examining the data demographically, as 73 percent of respondents age 34 and under feel that negotiating is a crucial part of the process, compared with 59 percent of respondents in the 35 to 54 and 55-plus age categories.

Additionally, 40 percent of respondents use the average transaction price as the starting point for vehicle negotiations, while 32 percent begin negotiating with the dealer invoice price. Only 9 percent of shoppers indicated they began negotiations with the manufacturer’s suggested retail price (MSRP). In addition, most consumers (38 percent) said that if they pay the average transaction price, they feel they have gotten a good deal.