Color Design and Purchase Price: How Vehicle Colors Affect What Consumers Pay for New and Used Cars

Abstract

Do consumers pay more just for the vehicle color when buying a car? For example, does it makes sense if the price a consumer paid for a red car is higher than for a white car with the same vehicle attributes? Some auto-related industry websites that deal with the topic of vehicle color (e.g., “Which colour?: Does colour choice really matter?” 2012; “Black, white top most popular vehicle color list,” 2013) endorse the importance of color as a key vehicle attribute in purchase decision. This practical question about vehicle color has some important implications from the consumer psychology perspective. A key aspect of this question is related to the fact that the vehicle color does not provide any functional values for many consumers as a driver. This idea is related to the aesthetic vs. utilitarian distinction of design (Veryzer, 1995), and unlike functional attributes such as the engine size, the number of seats, the body type (e.g., sedan versus SUV), the color attribute does not offer any practical benefi ts as the means for transportation. For this reason, it would be reasonable to see a higher purchase price for a car with, for example, a bigger engine or more seats, but how could it be rationalized if consumers pay more for a car simply because of its color?