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

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 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

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.

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