More Than Half Of All New-Vehicle Buyers Use the Internet During the Shopping Process

Autoparts Report, Oct 2, 2000

More than half of all new-vehicle buyers turn to the Internet for help when shopping for a new vehicle -- up from 40 percent in 1999, according to a new J.D. Power and Associates report. The primary reason people go online when shopping for a new vehicle is to find price-related information to help them negotiate with dealers according to the "2000 New Autoshopper.com Study."

"Although the use of the Internet for car shopping has grown exponentially, we expect the rate of growth to slow significantly over the coming years," said Chris Denove, partner at J.D. Power and Associates. "Part of the issue is that almost all new-vehicle buyers already have access to the Internet. Therefore, to sustain growth, the industry will need to improve the content of their Web sites in order to attract those fence sitters who already have Internet access but choose to stay offline while vehicle shopping."

Kelley Blue Book remains the most frequently visited site for shoppers searching for vehicle information, according to the study. More than one-fourth of all new-vehicle buyers visited the KBB.com site.

The fastest growth, however, came from shoppers who went beyond vehicle research and actually purchased their vehicle through on online buying service. This year, 4.7 percent of all new vehicles were sold through an online buying service -- up from 2.7 percent in 1999, the study found.

Among the buying services, Autobytel.com remains the most popular and now accounts for more than 1 percent of all new vehicles sold in the United States. The next largest online buying services in terms of new-vehicle sales are Microsoft CarPoint and CarsDirect.com, respectively, according to J.D. Power.

"A very interesting finding is that the people who use online services are the ones who need them the least," Denove said.

"Online buyers tend to be well-informed, aggressive shoppers who would be prepared to negotiate with dealers without the aid of the Internet."

The Ford Division Web site is the most frequently visited automobile manufacturer Web site -- more than 1.5 million vehicle buyers will log onto the Ford Web site this year before buying their vehicles, the company said. Ford buyers, however, are not the most likely to use the Internet for shopping.

That distinction belongs to Audi owners, with 81 percent of them turning to the Internet to assist in their automobile shopping, J. D. Power added. The high rate of Internet usage among Audi buyers results from its very affluent, yet relatively young buyer base. By comparison, only 38 percent of Buick buyers go online. The low rate of Internet usage for Buick is because its buyersare the oldest of any manufacturer.

The study also found that Yahoo is the most popular search engine for automotive shopping, while America Online is the most frequently used Internet service provider among automotive Internet users. Being the largest provider, however, has its drawbacks, the Power report said. "America Online attracts so many people who are new to the Internet that many of its clients do not engage in sophisticated Internet applications such as vehicle shopping," said Denove.

The study provides evidence that traditional offline advertising is an extremely effective way to drive traffic to a Web site. AutoTrader.com, which is currently the sixth most frequently visited Web site among new vehicle buyers, saw its hit rates soar after it launched an aggressive radio and television advertising campaign. "This is quite a testament to the power of advertising when one considers that AutoTrader.com is designed primarily as a tool for used-vehicle shoppers," Denove said.

The study also found a strong correlation between a buyer's likelihood to go online for their vehicle and to use the Internet for other types of shopping. For example, auto buyers who used their Internet access to help them shop for their vehicle are more than twice as likely to use online travel sites such as Travelocity.com.