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Affluents Dreaming of New Cars, Revamped Homes

Nearly half of US affluents not planning a major purchase this year

That new-car smell and the sparkle of fresh tile—in their existing houses—are top of mind for affluents.

According to March 2014 research by the American Affluence Research Center (AARC), which defined affluents as having a net worth of $800,000 or more, purchasing or leasing a new car and having a major home remodeling tied as the No. 1 major purchases US affluents planned to make over the next 12 months, each cited by 25.0% of respondents.

Around one-fifth of affluents planned to take a cruise, and AARC found that at least one area of the travel industry would see more affluent dollars in the coming year. Nearly three in 10 respondents said they would spend more on domestic travel, compared with 16% who intended to spend less. And likely a result of their renovations, the percentage of affluents who planned to put more dollars toward home furnishings or furniture was higher than those who said they would invest less in such items.

US affluent spending hadn’t completely rebounded: 45.0% of respondents were still being cautious with major purchases, saying they wouldn’t spend on any of the options listed. On top of that, affluents were more likely to spend less on an overwhelming majority of categories.

Still, August 2013 polling by Shullman Research Center found that US internet users with a higher income were more likely than users overall to purchase one or more luxury items in the next 12 months. Over half (55%) of respondents with an income of at least $1 million planned to do so, compared with just 34% of all internet users.

A Q1 2014 study conducted by Luxury Institute found that when wealthy consumers did want to spend money, their purchase decisions were fueled by past experiences. Across all age groups studied, around nine in 10 US affluent internet users—those with an income of at least $150,000—said that when it came time to buy, past experiences played a significant role.

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