Vehicle Ownership, Purchases and Leasing: Consumer Survey Data
Aizcorbe, Ana, Starr-McCluer, Martha, Monthly Labor Review
Motor vehicles play a central role in the modern American lifestyle. The vast majority of workers travel to work by private vehicle. Motor vehicles are one of the most widely owned assets, with more than 85 percent of U.S. households owning one or more vehicles in 1992. Costs related to vehicles -- vehicle purchases, operating expenses and repairs, and insurance -- account for a sizable part of the typical household's budget. Loans related to vehicle purchases are one of the most common forms of household borrowing, and monthly payments are important in expenditure patterns. For all these reasons, developments related to vehicle holding are important for analyzing living standards by households.
Several interesting trends related to motor vehicles have developed over the past decade. Climbing sticker prices for new vehicles and quality improvements have encouraged households to keep vehicles for longer periods. The incidence of auto leasing has grown substantially, with leases now estimated to represent as much as 1 in 3 new car acquisitions by consumers. There also have been significant changes in vehicle financing, including the growth of specialized auto lenders and greater competition for customers based on loan terms offered.
While there are several sources of information on motor vehicles, few provide much detail on vehicles owned by households. The Federal Reserve Board's Survey of Consumer Finances (SCF) and the Bureau of Labor Statistics Consumer Expenditure Interview Survey (CE survey) collect detailed information on motor vehicles held by households, including the timing and financial terms of acquisitions and disposals of vehicles. This article explains the basic features of the data on motor vehicles in both surveys. The first section compares the data for 1992, the latest year for which final figures are available for both surveys. We find that, despite some methodological differences between the two surveys, they yield strikingly similar pictures of vehicle holding by households. The second section of the article compares the survey data with figures on vehicle stocks obtained from other sources, primarily data on registrations. Although the comparisons are not straightforward, the data from both surveys are quite consistent with estimates of vehicle stocks. This confirms the value of using data from consumer-based surveys to analyze consumer vehicle holdings. Finally, we present evidence on the growth of auto leasing in recent years -- to our knowledge, this is the first analysis of this phenomenon using representative survey data. We conclude that more research is needed to determine the motivation for leasing vehicles because we find that the data do not support the commonly held notion that liquidity constraints (insufficient access to cash or loans) are a factor in the lease-versus-buy decision.
While the SCF and CE surveys are both based on representative samples, there are some notable differences in their designs. The Federal Reserve Board's Survey of Consumer Finances is conducted every 3 years, interviewing about 4,000 households. Roughly three-quarters of the households come from an area-probability sample, while the remainder come from a high wealth oversample. The Consumer Expenditure Interview Survey, sponsored by the Bureau of Labor Statistics, is conducted quarterly by the Census Bureau, and interviews roughly 5,000 households. Each household is interviewed five times on a quarterly basis. The survey uses a rotating sample in which 20 percent of those households are replaced every quarter. The differences in design give the two surveys different strengths for analyzing vehicle holdings. On one hand, the SCF oversample of higher wealth households makes it well suited for analyzing narrowly held assets, which turns out to be an important factor in auto leasing. (See section on "auto leasing.") On the other hand, the quarterly frequency of the CE survey permits analysis of changes in vehicle stocks over the business cycle. …