Mobile and Video Drive Research for Automotive Shoppers

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Digital Research Matters in Automotive Shopping

Today’s consumer is more connected then ever with more access to, and deeper connection with, automotive content and brands. Not only do consumers have more devices to choose from, but they own more devices than ever before! According to a Neilson Report, American’s on average own four digital devices and engages with media content over 60 hours per week. When we look at the stats, 72% of automotive research involves cross shopping between different digital devices. This includes in-market shoppers who are using connected devices, like mobile, to perform research and competitive shopping activities. As digital research has increased, car shoppers are in-market fewer months — 82% are in-market 3 months or less. The research process for buying a vehicle often begins online and ends at the dealership. The research process often kicks off with consumer advertising, where 3 out of 5 of the top ad formats persuading car shopping activities are digital. Over the process, there is an average of 24 research touch points on the path to purchasing a vehicle, with mobile and video driving this activity. Shoppers can research their new and used car purchases before going to the dealer, and with some mobile apps, even buy a used car.

Mobile Car Shopping

Screen Shot 2016-05-27 at 4.29.34 PMIn-market research and comparison searches on mobile devices has more than tripled since 2011 making mobile an important ad format for auto dealerships. According to JD Power, 48 percent of vehicle buyers that shop on a mobile device use their smartphone while at the dealership, primarily to access vehicle pricing as well as model information, inventory searches, and special offers and incentives.
When looking to buy a car, shoppers turn to mobile for a variety of reasons. The top 5 research activities on mobile are to view cars/trucks, call a dealer, read reviews, view current offers, and locate a dealer. Car shoppers are also using mobile for the same comparison activities. There are two primary actions in-market mobile shoppers do once they are on the lot; comparison/research and pricing activities. Comparison/research activities include looking at reviews, checking out a specific model, or reaching out to a family or friend for advice. If the car shopper is ready to buy they may search for pricing information, hours and contact information of a dealership, or researching discounts or other offers.

Video to Reach Car Shoppers

The amount of time consumers are watching car videos is rising year over year; video adds a human quality of the driving experience to the car brand. Things like infotainment systems, vehicle handling and emerging technology are easier and sometimes more exciting to illustrate with video. Nearly 84% of car shoppers said they would watch a video on their device next time they shop for a car. Of all the ad formats video is number one for driving purchase consideration amongst car shoppers. Videos help to introduce brands/new brands, help to learn more about specific cars/trucks, and to narrow down the purchase decision. According to Google Think Insights, 49% of car shoppers visited an auto dealership after watching a car/truck video!

In Summary

There is no doubt that digital research is driving automotive purchase decisions. With constant connectivity, shopping is 24/7. Whether making an everyday purchase or researching larger ticket items like cars and trucks, mobile is a critical platform for consumers. So how should this information impact your advertising if you are an automotive dealer? Here’s your dealership marketing checklist for making sure mobile and video are part of the mix:

  • Your website should have a responsive design for easy mobile access.
  • Incorporate more video into your site, display ads and social media.

“To Buy” or “To Lease” Your Next Car – That Is The Question.

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Automotive Leasing Trends

According to an analysis by Polk, leasing a car has accounted for 28.9 percent of all new car purchases by Millennials, those under 35, in 2015. This percentage exceeds the industry wide lease penetration rate of 26.7 percent, and reflects a 46 percent increase in leasing by Millennials over the last five years. By comparison, the share of leasing among all car shoppers has increased 41.7 percent during that period. The younger generation are definitely leasing – with college students facing loan debt – they are looking for the best ride at the lowest monthly payment. Leasing provides, for drivers of all ages, an option to drive a car with little down payment and allows for lower monthly payments than a conventional auto loan. Leasing results in the car buyer driving a newer car, with low maintenance, and less money overall. How much money can be saved leasing vs buying a car? According to Experian Automotive leasing could save nearly $100 per month.

Car Leasing Pros

Some of the advantages of leasing, instead of buying, include lower monthly and down payments, pay sales tax only on the portion you are financing, and drive a newer vehicle with less maintenance costs (as most leases come with a factory warranty to cover most repairs). This option also allows you to drive a new vehicle every 2-3 years when your lease ends. Also, if your lifestyle changes, transferring a lease to someone else is usually pretty easy.  There are two websites that will handle the transfer paperwork — as well as help you find someone to take over your lease. One transfer site is called SwapaLease, and the other is LeaseTrader. Another benefit is that there are usually no hassles when your lease ends! simply turn it in and sign on the dotted line.

Car Leasing Cons

You don’t own the car you are making payments on – you are simply renting it. Also, in the lease agreement, a set amount of annual miles is determined (usually 12,000-15,000) — if you go over, you will need to pay for excess mileage. If you have accrued any damages to your leased vehicle, you will need to pay for them at the time you terminate your lease. Another con is if your driving needs change during your lease agreement and need to terminate your lease it could be costly to do so.

Car Buying Pros & Cons

When it comes to buying a vehicle there are pros and cons as well. If you own the car you are free own and to modify it as long as you wish. For example, Jeep owners enjoy upgrading, modifying and changing up the look and features of their vehicle – you can’t do that in a lease! Also, if you own your car for an extended period of time, buying does save you money in the form of a trade in vehicle. If you own the vehicle, there is no cap on the miles you put on it. If your lifestyle changes, you can sell the car whenever you would like without any termination fees. The cons of buying a vehicle include needing more money down to purchase and higher monthly payments. You also have more money tied up in your car — which is constantly depreciating. Based on the Car Depreciation Calculator on Money-Zine.com, a brand new $30,000 car will only be worth about $18,000 after 5 years! There might also be more hassles when it comes to selling your vehicle vs just being able to “turn in ” your leased vehicle. If neither of these options work for you, a 3rd option is to buy a Certified Pre-Owned vehicle (CPO). Using the same Depreciation Calculator, buying a 3 year old version of that same $30,000 car might only cost you about $18,000 and the depreciation rate slows down considerably. After 5 years you could still sell it for about $8,000. Also, the monthly payments and down payments for a used car are going to be similar to a lease.

In Summary

Is leasing a car right for you? It comes down to lifestyle and preferences. Some people like driving a new car every two to three years or it might make sense if you are in a profession that gets a tax write off? But for most, it comes down to budget.  Do your research – there are a ton of auto payment calculators that can help you determine if  leasing or buying new or used is the best option for you and what best suits your lifestyle and finances.

 

 

Calculate Your Depreciation

Car Buying; the “Where” and the “When”

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Where should I buy it?

Although we see more of the car buying process happening online, visiting an automotive dealership is still a critical part of the process. According to Google Trends, search interest for “car dealerships near me” has doubled in the past year. And of those that used their mobile devices as part of the purchase process, one in three located or called a dealer on their mobile device. In addition to distance, car buyers look at other trends when looking to purchase a vehicle – some of them include seasonality, timing, to get the best deal!

Seasonality

Seasonality plays an important role for the used car shopper. Dealerships need to be on high alert in the Winter months – which offers the greatest potential discount to car buyers.  Every February, for instance, there is a spike in search interest for “cars for sale” possibly due to people anticipating a big tax return.  Summer is another important seasonal moment. When the temperatures rise, so does the interest in car shopping. Search interest for “lease deals” peaked last Summer, up 20% compared to 2014 according to Google Trends. One thing to note is if you have your heart set on a particular make or model, inventories can also become more limited during these peak times, so it is important to weigh the discount vs. getting the car you really want.

Timing; End of the Month, Quarter, Day and Time

As far as timing goes, leverage the best discount possible with the dealership at the end of the month. Also, buying a car at the end of a quarter might increase savings. Why is this a prime time to purchase?  It comes down to an auto dealerships goals, most automakers set sales goals for dealers, and then dealers set similar goals for themselves. Often, these goals include bonuses if they achieve them, which is a big incentive for auto dealers or salespeople who close extra car sales at the end of a month/quarter. Also, buying a car at the end of the day or week (Sunday) can also play into pricing. An eager dealer or sales person won’t let you leave if they know you are serious about buying which can also lead to savings.

The DEAL!

Start doing some research online by getting price quotes from multiple dealers before you go to the dealership to purchase. Also check if a car company is offering any bonus perks like cash back or special financing. If you are buying a used vehicle auto makers, like Ford, may offer lower pricing or special rates on CPO vehicles as an incentive – which can save you by having lower monthly payments. Also, refer to your bank to see if you can get a low interest loan, and then go to the car dealer to see what their financing offer is. Generally banks offer a 4% low interest loan.

Owning it…Our Tips? Shop for your ideal car early in the month or season, and purchase it later in the month or quarter/season. Get your test drives out of the way, and begin narrowing your list. When the last few days of the month come around, start visiting automotive dealerships to start the final negotiating process and own your ride!

Car buying; Is the car right for me?

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Woman shopping for a new car, talking to a car salesman.

Car buying

Do you remember the time when you were shopping with your parents or grandparents for a new or used car? Dealerships felt like playgrounds — as we climbed in and out of vehicles playing with buttons and pretending to be the driver in the front seat. The dealership visit would usually end with a test drive of a vehicle or two. It was also a time when people heavily relied on local dealerships to provide answers about a brand or features – far different from what we experience today. The car shopper today makes fewer dealership visits and depends on word of mouth, social media, digital, mobile, and video resources as their guide.

Car buying;  Is the car right for me?

Once you have shopped around – there is a moment when you ask yourself – is this car right for me? Depending on your circumstances and stage in life there are many things to consider. If you are a family, for instance, you might ask yourself if there are enough seats and room to transport your kids, friends & gear? SUV, Crossover, or Minivan? all are practical considerations. According to Google Trends, there has been an interest for luxury options on the rise with search interest up for features like panoramic sunroof and backup camera by 31% and 23% respectively, year-over-year. Also, during this phase car shoppers may look to YouTube for a virtual test drive prior to a visit to the dealership.

Manufacturer and Dealership Websites

Automotive manufacturer websites are also a good resource once you have decided on a vehicle. They generally feature packages, equipment options, and help you customize your vehicle with different configurations especially if you are looking for a new car. They can also help you find a nearby dealership and search their inventory. Click here for a list of the Top Best Car Manufacturer websites according to JD Power 2015.

Where should I buy it to get the best deal?

Next it is time to decide on whether you want to purchase a new, used, or certified used vehicle and start negotiating. Check the True Market Value (TMV) price of the car. Use the TMV price as a benchmark. For more on negotiating a used car, see the 10 Steps to Buying a Used Car to help give you tips and advice before going to the lot!

Owning it!

At the car dealership you will finish the sale in the Finance office. You will need to make sure you have insurance for the car before you driving it off the lot. The Finance department will try to sell you a number of additional items such as an additional warranty, anti-theft devices, prepaid service plans or fabric protection. Some people want peace of mind that comes with extended warranties, so this is something you might want to consider (unless your used car is Certified Pre-Owned (CPO) or still under the manufacturer’s warranty). Make sure that you review the dealership sales contract thoroughly. In most states the contract entails the cost of the vehicle, documentation fee, smog certificate, sales tax, and license fees.

In conclusion, after doing your homework, you can feel confident that you purchased a bargain instead of a lemon! Enjoy your ride.

On the Path to Purchase; How to Buy a Used Car in 5 Steps

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2016-03-15-1458081230-9409989-20cheapskate-thumbOn the “Path to Purchase”.

So, you have decided that it’s time to buy a vehicle? Purchasing “used” instead of “new” will offer you the best value in the automotive marketplace. Not only are the prices lower, but other benefits include; lower taxes, insurance, and depreciation costs. Whether you are looking to buy a car from a auto dealership, CPO, or private party, this list can help you make it the best car buying experience yet!

Budget and location.

First, determine your budget and then begin researching car brands online before heading to the lot. Here is a list of the top used cars brands from Consumer Reports. Consider what cars fit your budget, lifestyle needs, and whether purchasing CPO is important. Next, you can research vehicles on Craigslist based on your criteria, such as, how long has the car been on the market? any reductions? typically cars over 30 days have had at least one mark down. You can also filter your search by distance, mileage, price, and features; to narrow your findings and get the car you desire. Also, compare auto dealerships in your area to see if any of them are offering a better deal on the same vehicle. You can purchase a used car at; used car dealerships, used car superstores, and private party sellers.

Don’t be afraid to ask. 

Once you have narrowed your search to a few vehicles, it is important not to be afraid to ask questions. This rule applies no matter where you end up buying your vehicle — it can mean the difference of purchasing a “bargain” or a “lemon“. According to Consumer Reports here is a list of questions that are good to ask the dealership:

  • “How many miles does it have?”
  • “How is it equipped?”
  • “What’s the car’s condition?”
  • “How about the body and interior?”
  • “Has it been in an accident?”
  • “Do you have service records?”
  • “Has the car been recalled?”

How much is the car worth?

Before starting to negotiate price. Do your homework and determine what the vehicle is worth; there are many factors and tools available to help you. Some of the factors for determining price include mileage, year of the vehicle, condition, and any optional/additional features. Online tools including Kelley Blue Book and the National Automobile Dealers Association can help to determine the book price. Also, check Carfax to get a vehicle history report, the report includes odometer readings, existence of a branded title such as a salvage/junk title, or past registration as a fleet vehicle. Checking multiple resources, before you negotiate, will support what you are offering to pay for the vehicle.

Automotive manufacturer websites are also a good resource once you have decided on a vehicle. They generally feature packages, equipment options, and help you customize your vehicle with different configurations especially if you are looking for a new car. They can also help you find a nearby dealership and search their inventory. Click here for a list of the Top Best Car Manufacturer websites according to JD Power 2015.

Contact the seller and test drive!

If everything is still looking good up until this point – it’s time to contact the dealership/seller and take a test drive! If you like the way the vehicle drives it is good to have it inspected by an auto mechanic before negotiating. If the car is CPO (certified pre-owned) there is no need to pay for an additional inspection.

Negotiate and Own it.

  • First settle on the price of the vehicle you are buying; a general rule is 5-10% lower than the sticker price
  • Expect a counter offer
  • Be firm, yet courteous, when you have reached your final offer
  • Don’t discuss your trade-in vehicle until after you have determined your negotiated price
  • Be prepared to walk away than pay more than you should

Our Tips? Shop for your ideal car early in the month or season, and purchase it later in the month or quarter/season. Get your test drives out of the way, and begin narrowing your list. When the last few days of the month come around, start visiting auto dealerships to start the final negotiating process and own your ride!

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