As more and more consumers turn to the Worldwide Web to shop for cars, misconceptions flourish about both their online and offline behavior.
While 25 percent of all new-car shoppers in the USA used the Internet last year, another 29 percent had Internet access but chose not to use it, said Chris Denove, a director at J.D. Power and Associates who conducts consumer research about online usage.
He estimated that US online vehicle shopping is up to 30 percent now. Certain pockets of the country have higher usage. In Denver, Colorado, for example, 54 percent of buyers of Ford Division cars and trucks used the Web.
According to Denove, the top 5 misconceptions about online shoppers are:
Most online shoppers are young
One of the most widely held misbeliefs is that online car prospects are mostly in their 20s and early 30s. In fact, the biggest group using the Web for car shopping is between ages 30 and 45.
Luxury import buyers use the Web more than domestic vehicle buyers in the USA. Last year, about half of all Audi buyers used the Internet to help in the process - making it the brand with the highest online usage. Pickup truck buyers normally don't shop via the Web, while sport-utility buyers are much more likely to use it.
Customers in their 50s, 60s and 70s are starting to participate, said Patrick Steiner, Internet manager at Superior Acura in Overland Park, Kansas. Acura is Honda's US luxury division. Steiner said children and grandchildren are persuading their elders to surf the Web.
Cybershoppers make fast decisions
Online prospects can get a price on a vehicle within 24 hours, Denove said. But using the Web actually increases their shopping time. 'Those people are information hunters and gatherers who take the time to find out the information available,' he said.
Web auto shoppers are more affluent and educated than offline prospects, and they also have very different personalities. Cyber prospects are extremely aggressive shoppers, Denove said.
Steiner said online prospects typically send him 20 to 30 E-mails over two to three months before coming into the store. When asked in E-mails for their phone numbers, they refuse. It is also common for Web shoppers to send E-mails to as many as 20 dealerships to check prices.
Consumers sometimes use the Internet as a decision-maker if they cannot choose between two vehicle brands, said John Holt, co-chief executive of Cobalt Group in Seattle, Washington, which develops and operates Web sites for dealers. 'Sometimes it comes down to which dealership answers an E-mail first.' Online buyers sometimes suffer from 'information overload' and are unable to make a decision, Denove said. The similarity in vehicle quality adds to their confusion, but their analytical personalities also play a role.
They spend little time at stores
Denove said the most surprising finding of his research is that online shoppers, after weeks of research, go from dealership to dealership to get the best price. 'They try to beat the Internet price, and they're never satisfied,' he said. 'Just because someone drives a Mercedes-Benz doesn't mean they won't squeeze every nickel out of buying the car.' At the other end of the spectrum is a traditional shopper who visits just one dealership for a quick deal.
Cybershoppers have a shortlist
Online shoppers put more brands on their consideration lists and tend to be less brand loyal, Denove said. People who visit a dealership after gathering online information represent almost purely incremental business to a store. Only about 1 percent of those people previously had bought a vehicle from that retailer.
They settle final costs online
Only about 10 percent of what J.D. Power calls 'purchase-related activities' are done on the Web, Denove said. Those activities include checking lease rates and in-stock availability of specific models. He said his research suggests that Internet shopping generally brings savings, but the aggressive personality of the online shopper is connected with that.