A recent report from OC&C Strategy Consultants finds that car buyers in the UK and US are increasingly focused on price and functionality rather than brand reputation or prestige, underscoring a significant shift in consumer attitudes.

While the desire for car ownership remains steady, status as a factor in car purchases has declined since 2020, even in markets traditionally associated with brand loyalty and status-driven buying habits, the consultancy noted in a press release.

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In the UK, the percentage of consumers viewing car purchases as a status symbol dropped from 37% in 2021 to 31% in 2024, while in the US, this figure fell more dramatically — from 54% to 41% in the same period.

According to the report, younger consumers are leading this trend, with a 33% drop in those aged 24 and under who view cars as status symbols from 2018 to 2022, compared to a 15% drop among those 65 and older.

Economic factors are cited as key drivers of this shift, as inflation and cost-of-living pressures encourage consumers to rethink discretionary spending. For many, budget considerations are now paramount, with around six in 10 UK and US buyers beginning their car search with a specific budget in mind, according to OC&C’s Associate Partner Felicity Latcham.

Additionally, the report highlights that many buyers view car costs as a monthly expense rather than a one-time price, suggesting a growing interest in financing and leasing options over traditional ownership.

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However, OC&C’s analysis also notes that the overall cost of motoring in the UK has actually declined in real terms over the past decade. Although cumulative inflation reached 51% and motoring costs rose by 47%, these increases are on par with wage growth. Notably, while insurance prices have risen, both vehicle purchase prices and fuel costs have increased at a slower rate than inflation, making car ownership comparatively affordable.

China was the only major market to diverge from this trend, showing a slight increase in the percentage of consumers who view cars as status symbols, rising from 36% in 2021 to 39% in 2024.

Looking ahead, OC&C’s report stresses the need for manufacturers to prioritise affordability to appeal to younger buyers. Latcham noted, “The future of the automotive industry will rely heavily on providing competitively priced models for the mass market. The demand for affordable options will become even more critical as manufacturers work to increase the adoption of electric vehicles (EVs) despite consumers’ mixed interest.”

The report further suggests that Chinese automakers may capitalise on this shift, with 22% of EV shoppers indicating they would consider switching to a Chinese brand for a discount of £1,000 or less. To meet the evolving preferences of a budget-conscious market, OC&C recommends that automakers focus on financing models and subscription-based packages to provide attractive, cost-effective options.