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RealTime IT News

The Ugly Truth About Online Auto Sales

A new study indicates that although browsing auto sales sites is increasingly popular, only 2 percent of the 8.4 million users who made a car purchase after seeking information on the Internet actually bought a car online last year.

The report from Internet research and customer relationship management company Cyber Dialogue says that more than 21 million Internet users sought automotive information online in 1999, nearly doubling 1998's total.

New car purchases informed by Internet research accounted for approximately $100 billion in spending last year; direct online sales of cars accounted for only $5 billion in spending, the report said.

The report also said that automobile shopping is now the third most common product category sought online, behind only books and travel. But getting folks to buy cars online is proving more difficult. And recent internetnews.com stories based on reports from outfits like Consumer Reports that some online quotes may actually be pricier than in the real world certainly aren't helping to inspire confidence.

An overwhelming majority (87 percent) of digitally informed car buyers completed their purchase in person at a local dealer, the study found. This may be due, in part, to a consumer's post-purchase dependence on the dealer for help with maintenance and repairs, Cyber Dialogue said.

Internet comparison shopping sites are the most popular destinations for auto purchasers who used the Internet for product research (63 percent), ahead of both manufacturer sites (47 percent) and local dealer sites (26 percent).

"Manufacturers can regain control over their brands by orchestrating online partnerships and fostering Internet capabilities on the local, dealership level," said Daphna Straus, an analyst at Cyber Dialogue.

"To compete for the attention of prospective car buyers in a swelling sea of auto sites, manufacturers must vigorously build, maintain, and protect their online presence."

Other findings include:

  • Online users search primarily for price quotes and model specifications, particularly as they relate to new vehicles
  • Automobiles are the product category most likely to have brand opinions shaped by the Internet -- among Internet educated auto purchasers, 55 percent reported a change in their brand opinion
  • The findings are from Cyber Dialogue's American Internet User Survey, fielded each quarter as part of Cyber Dialogue's Internet Consumer Continuous Advisory Services

Founded in 1993, Cyber Dialogue provides strategic consumer information, advanced database marketing techniques (including tracking, targeting, and measurement software), and data mining services to send the most relevant message to the right customers at the right time.