Do People Actually Give Each Other Cars for Christmas?

What are the holidays without a little regifting? Last year, I wrote a post on thegeekticket.com about whether people give cars as gifts for Christmas. I did a little exploratory analysis of car sale data from 2010-2013 and reached the same conclusion as a similar article on Bloomberg: Yes, Virginia, December ranks as one of the top months for car sales. But I couldn’t really make any assumptions beyond that. This article updates that post by including 2014 data.

Technical note: Last year I also painstakingly compiled all my data in Excel, created pivot tables and downloaded everything into R as separate data frames. It was awful. This year, I used the XML package in R to scrape the data from goodcarbadcar.net, which posts sales data from the manufacturers and Automotive News Data Center. I then manipulated all the data in R to get the same results.

So which months are the most popular for car sales?

The following boxplot shows the range of cars sold by month between 2010-2014.

all-cars-2010-2014

I also broke the sales down by luxury and non-luxury brands. Here’s a refresher on how I determined the various brands were categorized:

I looked at sales split between luxury and non-luxury brands, using the handy Wikipedia category on Luxury Vehicles to identify those latter brands. Non-luxury brands included, among others, Chevrolet, Dodge, Ford, GMC, Honda, Jeep, Kia, Toyota, and Volkswagen. Luxury brands included, among others, Audi, Bentley, Infiniti, Jaguar, Land Rover, Lexus, Mercedes-Benz and Porsche. I realize some of the brands labeled “non-luxury” sell luxury models, but you get the point: Cars most people can afford vs. crazy expensive cars.

The range of sales by month for non-luxury brands mirrors the range of all cars sold because non-luxury brands move the most units. In other words, there isn’t anything terribly exciting about the following plot.

non-luxury-2010-2014

 

Looking at the luxury brands, however, produces a more interesting plot.

luxury-2010-2014

 

For luxury brands, December ranks as the top month when it comes to sales. It’s also the month when most dealerships are trying to get rid of last year’s models, which means you’re probably getting a good deal on that fancy, new luxury car. As I said last year: If you’re going to blow a ton of money on an item that depreciates in value the minute you drive it off the lot, why not do it when that item is on sale?

One thing I didn’t look at last year is which luxury brands sell the most in December.

luxury-dec-2010-2014

BMW, Lexus and Mercedes-Benz appear to be the top sellers in December. Looking at that chart, it’s a wonder how brands like Bentley, Jaguar, and Maserati stay in business… Until you read the following on True Car, “Bentley car prices start at $180,195 and they are typically only within the price range of the most wealthy.” Yep. An entry-level Mercedes (C-Class) starts at $34K. That means even if Mercedes sells five C-Class models, Bentley will still make more money by selling one car.

Even with the new data, I still haven’t answered the question in the title of this article: Are cars sold in December actually large, expensive gifts for loved ones? Unfortunately, I still can’t answer that because “reason for buying” is not a variable available in these data sets. If consumers were buying cars on Amazon and selecting “gift options” during checkout, that’s a data set I’d like to look at. Alas, my conclusion is the same as last year:

I can’t make a definitive statement that buying a car for someone as a gift is a significant trend. But someone, somewhere, is buying a car for someone else. We know this because the people who make giant bows for a living do a lot of business around the holidays.

So why do auto manufacturers feed us these messages about how it’s the norm to give a loved one a crazy expensive car for Christmas? Because they want it to be normal. The gift angle also sounds a lot better than the “We Have Our Annual Sales Report to Consider Sale.”