New Study Reveals Interesting Behaviors of Modern-Day Car Shoppers
Now more than ever, buyers are interested in the total price of the vehicle rather than the monthly payment.
Human behavior is an interesting subject. In fact, it's so interesting that private companies are willing to pay big bucks to try to understand and manipulate it to a certain extent. While this applies to many things, data on car-buying behaviors is highly desirable to companies with ties to the automotive industry, whether it's a car auction, a car dealership, or a bank's financing arm.
This recent study performed by Cox Automotive is called "Car Buyer Journey 2018," and it attempts to shed some light on the complex behaviors people expose while going through the process of buying a car, as well as their perception of the dealership experience. The study has been released once a year for five years, and the latest edition is based on a survey of 2,050 consumers who purchased or leased a vehicle within 12 months of September 2017.
Before we dig into some of the findings, it's worth noting that Cox Automotive, perhaps more than anyone else in the business, has its close finger on the pulse of the industry. The conglomerate owns important household brands like Autotrader, Kelley Blue Book, Manheim Auctions, Dealer.com, and a dozen other companies that sell and resell vehicles, as well as manage dealership inventories and vehicle reconditioning.
According to company's findings, modern-day buyers are spending less and less time in the market for a vehicle, and they're doing most of it online. Shocker. In 2017, buyers spent a total of 112 days "on the prowl" compared to just 108 days in 2018. During that time, buyers spent 61 percent of their time researching and shopping on the internet, and only 13 percent visiting dealerships in person. Out of the entire time buyers spent shopping for a vehicle, 21 percent of it was spent at the dealership where they chose to buy the vehicle.
This highlights another important finding of the study, which shows that 79 percent of buyers are satisfied with the dealership experience, but only 50 percent are content with how long it took. Fifty-nine percent of buyers were satisfied with how long the interaction with the financing department took, with 64 percent saying that the financing process took much longer than they expected. Got all that?
Perhaps the most surprising finding is related to consumer behavior in regards to vehicle pricing and financing. Out of the shoppers that were surveyed, 47 percent said that the total price of the vehicle was more important than the monthly payment. This is an important finding considering that 54 percent of car buyers request monthly payment information while researching a vehicle online. In years past, buyers would almost entirely focus on monthly payments rather than gross sums.
Cox Automotive also explored many variables of the car-buying experience, such as where buyers began and ended their search and how they communicated with dealerships, but they also quizzed buyers about something rather unorthodox. Were shoppers driven to purchase a new vehicle based on need or want? The findings show that the number of buyers who bought a vehicle due to desire has decreased from 44 percent in 2016, to 45 percent in 2017 and just 29 percent in 2018. On the other hand, the number of buyers who bought a vehicle because they needed one increased drastically from just 56 percent in 2016, to 55 percent in 2017, to 61 percent in 2018.