A new report by Carzone.ie looking at the car sales landscape in the wake of the Covid-19 pandemic has shed light on some interesting buying trends.
The report is based on a survey of more than 2,000 car buyers and 150 dealerships nationally and, although the finding that 75 per cent of people now begin the car-buying journey online is, perhaps, unsurprising, more startling is the fact that 50 per cent of people would buy and pay for a new car online without seeing it in person.
Beneficial to dealers
Dealers seem to be the main beneficiaries of these changed car-buying trends, with 48 per cent of those sellers surveyed saying that they believed it made the buying process faster as customers were now further along the decision-making process before they contacted a dealer. More good news for dealers is found in the figure of 65 per cent of buyers surveyed saying that their budgets had either increased or remained the same since the pandemic.
Two-thirds of buyers purchase their cars from dealerships and 60 per cent intend to return to the same dealership in future. 37 per cent of buyers feel that dealerships offer the best vehicle variety and availability; 30 per cent believe that dealers offer the best price on vehicles. It pays, too, for dealers to arrange for faster deliveries as 44 per cent of buyers said that they'd pay more money to receive their car sooner.
Decision influencers
30 per cent of buyers surveyed said that word of mouth was an instrumental influence in their choosing a make and model with 87 per cent of those buying online saying that they'd be more likely to buy a car from a dealer if they could read online customer reviews. Also a big influence on buyers' choice of make and model is brand loyalty, with 30 per cent saying that it was influential.
When it comes to paying for their cars, 69 per cent of buyers said that they would use a loan or finance to pay for their next car. A personal contract plan (PCP) is the most popular option for finance, followed by credit union loans and hire purchase. 84 per cent of respondents said that they were more likely to consider purchasing a car that had the monthly financing cost displayed on the advert.
Buying and paying online
56 per cent of people said that they would pay the deposit for a car online, citing convenience and payment as the key reasons for that decision. With such a high level of trust in dealerships, perhaps then, that figure indicating that 50 per cent of people would buy a new car online without seeing it in person becomes less surprising. 50 per cent of recent buyers also said that they did not test drive their car before purchase.
38 per cent of people, however, said that they would buy a used car online without seeing it in the flesh, though most said that the ability to take a "virtual tour" of the car online, a good pre-existing relationship with the dealer and the ability to speak to the seller on the phone were important factors underpinning trust when it comes to buying cars unseen.
Suspicions remain
That still, of course, leaves the 50 per cent of car buyers who wouldn't be willing to buy a car online. Of that cohort, 75 per cent said they'd like to see the car in person first; 70 per cent said they'd prefer to test drive the car before making a decision; 47 per cent said they'd prefer the ability to negotiate face-to-face with the seller on price.
Insight
Commenting on the figures, Karl Connolly, Carzone's audience manager, said:
"The results are fascinating, revealing what has changed about the car buying journey and how the industry and car buyers are adapting to those changes. Surprisingly more than half of recent car buyers that were surveyed didn't do a test drive before purchasing their vehicle and 93 per cent were satisfied with the the changes to the car buying journey as a result of the COVID-19 pandemic. Our report has shown that COVID-19 has accelerated changes to the car buying journey that were perhaps already coming down the tracks, and it looks like those changes are here to stay."