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Internet Slows Down Car Buying

Internet Slows Down Car Buying

More than 80% of new-car buyers in the U.S. use the Internet to shop and do research, up from 54% in 2000.

LAS VEGAS – The Internet may make car shoppers better informed, but it isn’t speeding up their buying.

In fact, it has slowed down the purchase process, according to market research presented at the J.D. Power and Associates 2011 Automotive Internet Roundtable here.

More than 80% of new-car buyers in the U.S. go online to shop and do research before going to the dealership, up from 54% in 2000, says Arianne Walker, J.D. Power’s director-media and marketing research.

If that Internet activity enhances user knowledge, “it is not helping consumers become more decisive,” says Steve Witten, J.D. Power’s executive director-U.S. automotive research.

Research indicates online car shoppers spend more time gathering information, taking longer to decide what to buy, because of all the accumulated information to sort through and consider.

Online cross-shopping also extends the buying process, Witten says.

Dealerships sometimes hold up the process, in part, by responding slowly to Internet lead submissions, according to the J.D. Power market review.

Dealers respond to lead inquiries within 24 hours 95% of the time, and within one hour 33% of the time, “but if a dealer thinks of lead submitters as customers, you don’t wait an hour to introduce yourself at the dealership,” Witten says.

Back-and-forth emails between dealerships and customers might bog things down, but the exchanges boost the chances of a sale, he says. “The more communication with an online lead customer, the more you are going to sell.”

Still, “the online lead process is not streamlining shopping,” Walker says.

Tracking new-car buyers’ online activity is relatively straightforward, but trying to zero in on them in other ways is more elusive, she says. “They are different demographically and psychologically.”

Younger auto consumers use the Internet more often to shop, check inventory and get pricing information. But older people are slightly more likely to submit online leads.

“It is interesting to look at who is submitting leads,” Witten says. “It is 27% of the under-30 age group. It’s 28% for both the 50-59 and the 60-69 age groups.”

Third-party automotive sites remain popular throughout the buying process, especially for vehicle-inventory searches, J.D Power research shows.

More than twice as many car buyers visit auto maker websites toward the end of their shopping than at the start. “As more shopping goes on, manufacturer sites become more important,” says Walker.

The most frequently used tools on auto maker websites are build-a-vehicle configurators (31%), dealer locators (25%) and deal offers (25%).

Online videos are becoming more popular with car shoppers. Sixty-three percent of them say they got more interested in a vehicle after seeing a video of it, Walker says. “We’ve seen a 42% growth in mobile-device video downloading, so the viewing is on both big and small screens.”

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TAGS: Dealers Retail