Madison gross formal.jpg
Millennials are more likely than other groups to say car shopping is fun, Gross says, referring to survey results.

Car-Buying Journey Twists, Turns, Changes Directions

In a Wards Q&A, CarGurus lead researcher Madison Gross talks about the vehicle-buying behavior of various demographic groups.

Most automotive shoppers show indecisiveness when buying a vehicle, according to research by CarGurus.

The online automotive marketplace recently followed the digital-purchase paths of more than 3,000 car buyers. The resulting Buyer Insight Report highlights many factors contributing to the buying journey that can twist, turn and change directions.

That’s why many consumers show an early interest in one vehicle and end up buying another. CarGurus research focused on the car-shopping behavior of Millennial parents and non-parents, men and women, Hispanics, high- and low-income people and truck shoppers.

In a Wards Q&A, lead researcher Madison Gross, CarGurus’ director-customer insights, talks about what the surveys say.

Wards: Your study looks at pickup-truck shoppers. They are kind of a different breed, a growing breed. Some use their trucks to earn a living, others just like trucks.

Gross: Eighty percent of people who bought a truck knew they were going to from the start. They know what they want. But they were less likely than other groups to know where to purchase. They are kind of dealership-agnostic. They also as a group were twice as likely to say negotiation was one of the hardest parts of their purchase. Interesting, because you think of truck shoppers as really confident.    

Wards: When they decide to buy a truck, is it a particular brand or are they unparticular about that? 

Gross: They are certain on a truck vs. another category of vehicle. There is higher brand loyalty among truck buyers than other categories. But still, over 50% of people who bought a truck switched brands.

Wards: The study got into different demographics, such as Millennials and Hispanics. Talk about that.

Gross: Three things make Millennials unique. One is they are three times as likely to be buying because of a major life event like a new job or a growing family. That impacts their shopping.

Thirty percent say they are shopping urgently. That ties into those life events. They also are more likely to say car shopping is fun.  

Secondly, they are more likely to start off certain, but later change their minds about what vehicle to get. That includes whether to get new or used, buy or lease, make and model and the dealership to purchase from.

Thirdly and not surprisingly, they over-index on digital. They also are more likely to contact a dealer ahead of their visit. We often hear Millennials have high service expectations. I think about that when it comes to appointment-setting when they are ready to buy. If they made an appointment, they expect the dealer will be ready for them. Dealerships need to give them the appointment experience.    

Wards: When you say Millennials by and large enjoy shopping for cars, does that imply dealers are doing a good job at selling them cars?  

Gross: People are visiting only one or two dealers on average. It used to be four or five. Dealers have felt that. There’s more pressure with every lead them comes in. My perception is the dealership experience has gotten a lot better over the past five or 10 years.

Wards: Back to the indecisiveness. Depending on where you are as a dealer, that shopper uncertainty could mean trying to do one of two different things: conquest a customer or retain one.

Gross: We didn’t research the dealership point of view for this. One thing we looked at was how many people were switching from one brand to another. The high end was 77% who left another brand to buy a Nissan. The low end is Ford with 54% switching to that brand from another.

There are two ways of interpreting (the latter). One is a high percentage of people switching to your brand reflects brand momentum. On the other hand, a low percentage of people switching to your brand can indicate you have a lot of loyal customers. That can be a sign of brand strength.

This lack of loyalty, yeah, you’re right; it’s a double-edged sword for dealers.    

Wards: Were you surprised by the indecisiveness?

Gross: I think 70% of people switching brands is pretty high. 

Wards: Why do people go to third-party sites such as CarGurus as much as they do?

Gross: People talk about the wide selection and information they can get on pricing. Third-party sites can deliver those things because they have selections across many dealers and brands.

Wards: Third-party sites also have reviews.

Gross: One of the interesting things we saw there was more people say they are looking for consumer reviews than expert reviews. In other industries, we often see the opposite.

Wards: Did you look at how long the average shopper journey is from start to finish?

Gross: We asked people that. The average time is five weeks. That’s bit shorter than what other sources who’ve done similar research have shown. I think that’s because people are asking themselves, “OK, when did I really decide to start shopping for a car?”

Wards: Shoppers are different. People who need a new car, opposed to people who want one, will have different lengths of shopping.  If your need is urgent, it cuts the shopping time.

Gross: We looked at higher- and lower-income Millennials. The higher end, not surprisingly, is buying because they are ready for something new or want an upgrade. The lower-income group is likely buying because their current car broke down and they need to replace it fast. 

Wards: Any other survey take-aways that surprised you or confirmed what you thought?

Gross: We looked at Millennial parents vs. non-parents. The Millennials with young kids tend to value to dealership reviews more. They also tend to value safety more. Millennials without children tend to be younger and less experienced. They enjoy car shopping more and it takes them longer.

We also looked at men and women. Women tend to care more about reliability, budget fit and expected fuel and maintenance costs. Men are more likely to be automotive enthusiasts who say a car says a lot about its owner.     

Wards: Those gender priority differences present some interesting potential shopping situations. For instance, if a man and women are at a dealership to jointly buy a vehicle, the salesperson is dealing with two different customers interested in different things.

Gross: That’s really interesting. Our next study will ask participants more about who they are shopping with, whether it’s a spouse, parent or trusted friend. We want to learn more about the dynamics of co-shopping.

Wards: What did you learn about Hispanic auto consumers?

Gross: They tend to be enthusiastic shoppers. They are more likely to say the car-buying process is fun and more likely to enjoy negotiating. They also are more likely to use mobile (devices) while shopping and at the dealership, comparing prices and confirming information.

Wards: That’s smart as a shopper but can be intimidating to a dealer if customers in front of you are using smartphones to check everything you say.

Gross: We talked a minute ago about co-shopping. Sometimes a shopper is at the dealership and on the phone talking with someone who is involved but not there. That can be challenging to a dealer. You have one shopper who’s there and another who’s not. And you need to work with both.          

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