40 Percent of Vehicle Shoppers Use Internet

More than 5 million new-vehicle buyers will use the Internet this year to collect information to aid them in deciding what vehicles to purchase, according to the 1999 New Autoshopper.com Study by J.D. Power and Associates.

According to the study, the percentage of new-vehicle shoppers using the Internet to help them shop for a vehicle increased from 25 percent in 1998 to 40 percent during the first quarter of 1999 and is expected to be more than 65 percent by the end of 2000.

J.D. Power’s study also found the average Internet shopper visits six automotive Web sites and spends more than four hours looking up automotive information online. This indicates that new-vehicle shoppers are relying more and more on Internet research to help determine what make and model of automobile to purchase.

“More than one-third of the Internet shoppers surveyed report that they crossed at least one vehicle off their shopping list as a direct result of information they found online,” said Chris Denove, director of consulting operations at J.D. Power and Associates. “This is bad news for manufacturers and retailers who want customers to test drive vehicles and not narrow their vehicle selections based on cold hard facts alone.”

The growing influence of the Internet is likely to hit domestic manufacturers the hardest, the survey found. The more time a person spends online, the less likely he or she is to purchase a domestic vehicle. Overall, domestic share drops to 58 percent among Internet shoppers. Furthermore, only half the shoppers who submit a purchase request to an online buying service purchase a domestic vehicle.

“The Internet puts added pressure on manufacturers to deliver quality products and service,” Denove said. “If a vehicle has a problem, you can bet it will be posted on the Web, and that is going to hurt sales.”

The study also found that the percentage of people purchasing their new vehicle through an online buyer service more than doubled from 1.1 percent to 2.7 percent since 1998–and may reach as high as 5 percent by 2000.

“Statistics show that the online buying services are saving people money, and since price is the primary concern among Internet shoppers, you can’t help but to be optimistic about the future of online selling,” Denove said.

Overall, the study found that Kelley Blue Book is the most frequently visited automotive Web site, with half of all Internet shoppers visiting the site to gather vehicle information. Among online buying services, autobytel.com is the largest, accounting for 45 percent of all new vehicles purchased through an online service.

In addition to the study’s optimism, it also identified a few areas where new vehicle shoppers prefer doing business through traditional methods. The study shows that the number of new-vehicle shoppers using the Internet to finance their vehicle remains very low, and that most Internet shoppers do not intend to use the Internet for help maintaining their vehicle.

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