First it was books and records; now it's holidays and cars. Consumers' attitudes towards buying products online is becoming more relaxed due largely to familiarity – more than half the UK's 25m homes have internet access, while many more people are online at work – which makes them more confident about the new breed of web traders.
But while consumers are increasingly happy to purchase a new car unseen, far fewer will make that leap of faith on used cars – they want to kick the tyres first. A new survey by Auto Trader, in association with AM, reveals that 28% of people will buy a new car online without seeing it first, while 18% would consider it. For used cars, that figure drops to just 7%. And a whopping 47% reject outright any notion of buying cars unseen.
Unlike other products, cars are a highly charged and emotive subject. Despite all the measures put in place by online retailers to protect the customer and win their confidence, it seems most still prefer to visit the dealer first when buying used cars.
The power of the internet as an influence on the purchase, however, can not be denied – it's rapidly becoming the primary source for background information when searching for a used car. Almost half of the 7,000 people surveyed by Auto Trader say they have purchased a vehicle they originally found online. And they are starting the research process earlier: Sixty-eight per cent began considering their options up to three months before making the purchase; 22% between three and six months.
It underlines the importance of having an accessible dealer website, up-to-date stocking levels and persistent staff. For dealers without the resources to constantly upload stock – one of the biggest complaints of dealer websites is the amount of outdated stock – there are other options, including HPI's Exchange which manages and updates website stocking lists.
Alternatively, they can work more closely with stock locator guides like Auto Trader.
To really succeed, however, dealers do need to have one member of staff with responsibility for handling email enquiries. Not only can they respond to enquiries promptly, but they can also track potential customers and maintain contact until the car is purchased. Remember: once customers enter the showroom, they are at the point of making the purchase; but when they enquire online, they might be several months away from making their decision (more for new cars), so it's important to stay in touch.
Forty-four per cent of those surveyed had contacted a dealer via email, although the preferred option is to leave a phone number for the dealer to call them (50%), while 26% will drop by the showroom once carrying out their research.
Dealer response rates to emails appear to have improved since AM carried out its own research in 2002. More than half (56%) got back in touch with the customer within a day – of these almost 20% were within two hours – while a further 18% made contact within two days. It's an improvement, but there are still too many who fail to appreciate the immediacy of the internet. Fourteen per cent left it at least a week before contacting the customer, while 14% didn't even bother to call or email back.
So why do people use the internet? Speed and convenience is the obvious answer (85% say it's a strong influence), but also important is the fact that there are no 'pushy' sales staff to encounter (59%) – probably more perception than reality these days – and that they can access vehicle data and road tests. In addition, the ability to be able to search nationwide for the best car prices and exact specifications appeals to 49% of buyers.
And it's not all about the cars themselves. Most buyers either research or purchase insurance (83%) and loans (53%) online – if your dealership offers these products, it needs to be promoted on your website, or the customer will look elsewhere, usually the High Street banks. They want funding sorted before they enter the showroom, and the internet gives you an opportunity to capture that business.
The survey also asked customers to rate carmakers' websites. Top were the premium brands Audi, Lexus and Mercedes-Benz; bottom were Kia, Daewoo and Daihatsu. But it's the middle ranking and budget carmakers that have most to lose from poor websites, according to the research. Consumers are looking for used cars and cheaper new cars via the internet – 63% have budgeted for a car costing less than £10,000; just 10% are looking to pay more than £20,000.
Click here to read the linked story 'They've never had it so good' by Tony Willard.