Effects of Peer Influence, Satisfaction and Regret on Car Purchase Desire

Car ownership levels are increasing rapidly in developing countries, leading to unsustainable developments. Following previous research, we suggest that peer influences are important determinants of desires to purchase cars. Using data from 134 undergraduate students who own a car from Bandung, Indonesia, this study constructs through principal component analysis four groups that partly explain the desire to trade in one's current car to a better one: Friends, Commercial, Siblings and Parents. These four factors, along with the degree of satisfaction and regret of having bought one's current, are used in correlation analysis to determine their correlations with the desire to purchase a different car. Our results suggest that the influence of siblings is a significant determinant. We discuss that this might highlight the importance of peers in car purchase decision.