One of the most surefire methods to attract and connect with your customers is to have a solid understanding of your target audience. That’s why, at TRADER, we are committed to consistently staying on top of consumer trends and relaying our research findings to our dealer partners.
In February 2021, we partnered with the Angus Reid Group to survey over 1,000 Canadian car buyers, who either purchased a vehicle in the past two years, or, intend to purchase a vehicle in the next two years. At the foundation of the study, we wanted to gain a better understanding of the perceptions and priorities of consumers throughout the car buying process. Let’s take a deep dive into what we’ve learned from Canadian car shoppers and buyers alike.
When rating the importance of purchases, over half of our survey respondents consider a vehicle to be an important life purchase, second only to a home. Taking a deeper dive into their vehicle purchase mindset, shoppers were asked to share their feelings with regard to the process. Of those surveyed, 81% said they feel anxious when purchasing a vehicle. The primary source of this response is grounded in the belief that they may be spending too much, (63% of respondents). Similarly, 49% of consumers expressed feeling uneasy about negotiating a better deal, as negotiations are not their strongest suit. With that said, consumers believe that negotiations are an essential part of the purchase process, as three-in-four buyers did engage in at least some level of haggling specific to the purchase price of their vehicle.
Digging deeper into the negotiation aspect, 63% of consumers report that the primary reason for not negotiating is grounded in the belief that the asking price was fair. When we look at the reasons why consumers do negotiate on price, 48% state they always negotiate, 33% wanted to pay less, even if the asking price was fair, and, 33% wanted to get a great deal.
So how can you help your customers build comfort and confidence in the car buying journey? A large percentage of car buyers say that there are certain factors that would increase their faith when discussing the price of a car. At the top of the list, 81% of consumers claim that access to a price comparison tool that shows fair market value would instill confidence in the price of a vehicle.
Car shoppers use a variety of online sources to compare prices. These remain consistent with what we’ve observed through other recent consumer research, with 77% using online automotive marketplaces, 69% visiting manufacturer websites, and 66% browsing dealership websites to help build confidence when discussing price.
Taking a look at the rankings of the top three most important factors when purchasing a vehicle, as reported by consumers, 77% rate price as most important, followed by fuel economy at 49%, safety at 45%, and 40% rate the brand as important. Pivoting to ranking the top three factors that encouraged these same consumers to purchase a vehicle, price remains the most influential. Of those surveyed, 69% claim that feeling like they got a good deal was the most encouraging factor, while 61% state that getting a good price break for trading in their current vehicle motivated them to buy, and 57% were encouraged by lower interest rates.
Consumers are willing to put in the work to get a good deal. Ninety-two per cent of respondents either do a lot or a moderate amount of comparison shopping to find a bargain. More specifically, 63% of younger car buyers (18 – 34) are willing to do a lot of shopping around – even more likely than older buyers 55+ (51%) – as this often represents their first large purchase.
The majority of car buyers are satisfied with their vehicle purchase price. Specifically, 84% said they were pleased with the price they paid for their last vehicle. If you’re wondering what it would take for a consumer to pay more for a vehicle, the top factors, as reported by consumers, are fuel economy, getting the brand they want, a good assortment of features and amenities, and low insurance rates.
With regard to the pandemic, most consumers report that COVID-19 has not changed how much they would spend on a car. Only 27% of respondents claim they would need to decrease spending, resulting from a reduction in income earning, albeit maintaining the necessity to drive.
Distilling these latest consumer research findings, we have three key takeaways for our dealer partners. We recommend delivering the utmost value to the car buying experience with very thorough online listings, honest and upfront pricing, and, access to price comparison tools. These three aspects play a crucial role in providing for a more transparent and less stressful negotiation process, avoiding any back and forth between your sales personnel and the end consumer, and often result in working sales opportunities that are far more ready to close!