Convenience and proximity are key aspects for car buyers, as Carwow’s head of research Sarah Blewett outlines some of the marketplace’s latest findings.
A recent Carwow survey revealed that one in two consumers still find changing cars stressful, especially when it comes to the proliferation of new brands, fuel types and retail models to the market, and online content is one of the many ways they increase their confidence.
Therefore, we’re seeing an increase in the number of car buyers who make use of multiple sources to research and buy their next car.
Consumers are now more informed than ever about their options – this could be looking at content on YouTube or reading online reviews – and their car buying journey is evolving accordingly.
For example, people can access tools that aid price comparisons or finance calculators, both helping them find a car that suits their needs (and pockets) and arming them with valuable information for when they interact with dealers.
Interestingly, we notice a difference between the ICE and EV car-buying journeys. For those considering an EV, the period of time from their first visit to purchasing a vehicle averages 192 days, compared to 149 days for an ICE vehicle.
Typical buyers will perform 32 unique car configurations, consisting of nine different models across five brands, and get in touch with three retailers before they finalise that one purchase. With EV buyers, where there is a lot less confidence, we see the fluidity between car brands go up even more; typically configuring 10 different models, across six different brands.
Growing confidence in a digital-led retail experience
Our data reveals that one in four (28%) of Carwow customers who bought a car – the majority being new – in 2023 said they completed all aspects of their purchase journey digitally – from research to online payment. It was a different story though three years in 2020 when only 13% of consumers who bought a car said they researched and purchased entirely online.
Though Covid would have had an influence on buyer journeys in 2020, this highlights the growth in consumer confidence around a digital-led retail experience as part of the overall car buying journey.
We also found a significant increase in the proportion of car buyers who say that the car they ultimately bought was one found online, rather than in person – with 53% of respondents (who bought a car) in 2023 finding a car online compared to only 38% in 2020.
However, our research also underlines the continued importance of an omnichannel sales approach, with many consumers still wanting to interact with a retailer before making a purchase. Over half (55%) of those who bought in 2023 said they researched and compared cars either in person only (18%) or both online and in person (37%).
Despite continued cost-of-living pressures, car buyers are becoming less influenced by price and are more likely to make a purchase decision based on dealer proximity. We looked at enquiry and sales patterns during the first quarter of 2024 and identified which factors were most likely to prompt buyers to place orders with a particular dealer.
We found that, for 70% of all new orders placed in Q1, the dealer chosen was the nearest available, while in 53% of cases, the dealer was also the best-rated option on the platform.
Significantly, fewer than a third (31%) of all orders placed were for the cheapest offer available. This tells us that, even though an overwhelming majority of buyers are researching their next car online, many still prefer to transact locally and in person after having carried out their online research. We know that local buyers are important to our retailer partners too, helping them to win their area of influence and enjoy the aftersales benefits that come with selling to local customers.
Multi-franchising makes sense
Car buyers don’t always know what they’re looking for in terms of make and model, but they do know what they need from a vehicle. This makes them open-minded to trying new brands. We know that 75% of car buyers haven’t made up their minds and are open to suggestions on everything from ownership models, finance options, makes and models and whether they buy new or used.
The majority of people still want to physically see and potentially test drive a vehicle before they commit to buying it, so it’s hugely beneficial if a consumer can visit a multi-franchised site and test at least two different brands and models.
Consumers are becoming increasingly comfortable and confident in selling cars online whether that’s through guaranteed part-exchanges or to car buying services. Many consumers use marketplaces to change their cars all in one place, with the ability to sell their car and buy their next one from our network of trusted retailers. Completing more of that process online ultimately offers more convenience and choice, which many customers prefer.
We ran a study in 2023 which showed that the majority (58%) of private sellers said getting a fair price is the most important thing to them when changing cars. Perhaps surprisingly, this was ranked even more highly than getting a car that works for everyday family life (43%) or upgrading to a better model (37%).
When it comes to codes of practice, there are many safeguarding measures in place to help protect customers, and we see it as our responsibility alongside our retailer partners to help raise customer awareness about their rights.
Many users aren’t aware of the common codes of practice and more consumer education is required on this across the automotive space.
Buying and selling a car is one of the largest financial transactions that people can make and many don’t realise that they can actually choose to return a car that was bought online. Knowing this would give extra peace of mind to online buyers and help to fuel more sales for retailers by derisking the transaction.
Indeed, many forward thinking retailers have incorporated 7-14 day returns promises into their marketing messages to give consumers more confidence.
Author: Sarah Blewett, head of research at Carwow Group