This sweltering hot summer is apparently NOT the best time for Americans to be buying new cars or homes.
The weather can really mess with our heads when we’re shopping. Indeed, new research says that meteorological conditions can significantly influence our decisions, even when we’re purchasing big-ticket items such as convertibles, four-wheel-drive vehicles and homes with swimming pools.
Impulse shopping is rarely a good idea, particularly if it means people are spending more than they should. The new study, published by the National Bureau of Economic Research, not only asserts that the idea of impulse purchasing is a real factor in automobile and real estate sales but also quantifies the problem.
Based on an analysis of some 40 million new and used vehicle transactions and 4 million single-family home sales in the U.S., here are their basic revelations about weather’s influence on car- and home-buying, corrected for seasonality:
A 20-degree increase in temperature equaled an 8.5 percent increase in convertibles sold.
In the two to three weeks following a snowstorm of about 10 inches, the percentage of four-wheel-drive vehicles sold increased 6 percent.
A 20-degree increase in temperature leads to a 2.1 percent reduction of black vehicles sold. And moving from overcast to clear weather reduces the sale of black vehicles by 5.6 percent.
A swimming pool can increase the value of a home by $1,600 if it’s sold in the summer instead of the winter.
It doesn’t seem to me like gobs of people are going broke or making a killing on these weather-driven impulse purchases, but perhaps the statistical significance of these results should be enough to make us take pause the next time we’re in a high-pressure sales situation.
Just because it’s a sweltering hot day doesn’t mean we need to be convinced to buy a convertible. (Does it?)
The study’s authors go as far as to say their work argues for the implementation of laws designed to help us better evaluate our decisions—for example, laws that allow consumers a “cooling-off period” for cars and homes (pun intended). The Federal Trade Commission already has a “cooling-off rule” to deal with high-pressure sale situations such as door-to-door sales, but it does not apply to real estate and automobile sales.
I was pleased to read in the paper that the authors noted an obvious catch to this plan: While some consumers might benefit from an opportunity to reverse a decision once they have “cooled-off,” others might jump at the chance “to game the system by ‘buying’ a new convertible at the beginning of a holiday weekend and returning it after a few days, claiming to have had a change of heart.”
Maybe it’s better for everyone if we just come up with a new adage, like “Ignore the weather when you’re buying a car.”
It’s not as catchy as “Don’t shop on an empty stomach,” but you get the point.
IMAGE: People stop to look at a Lamborghini car displayed for sale besides the marina at the Super Weekend on July 15, 2012 in Torquay, England. Despite fears that the UK’s recession will carry on into the second quarter, the Super Weekend offered the public a chance to sample luxury brands such as Aston Martin, Ferrari, Porsche, Sunseeker, Mercedes-Benz, Princess Yachts, motorbike companies and other ‘super’ brands. (Photo by Matt Cardy/Getty Images)