Digital auto buyers still rely on dealer, NADA analysis finds

Digital auto buyers still rely on dealer, NADA analysis finds

Consumers now spend much more time looking for a new or used vehicle online than offline, NADA Used Car Guide says in its recent report on digital trends in auto retailing. As a result, consumers now visit fewer dealerships in person, but the influence of the dealer still ranks high.

A DME-automotive survey found that 71 percent of new-car buyers and 62 percent of used-car buyers visited only one or two dealerships before buying. But –dealer sites were ranked ahead of manufacturer sites, search engines and third-party sites as the number one source of information for consumers during the shopping process in a Google research study, Digital Drives Auto Shopping,” the NADA study says. In fact, consumers in the Google study ranked –dealer visit, test drive and salesperson” well above –family and friends” as the primary in-person sources of information that most influenced their purchase choice.

Mobile technology is gaining in importance during the auto shopping process particularly smartphones, but also tablets. –Of particular interest to dealers, 46 percent of Gen Y and 40 percent of non-Gen Y automotive Internet users reported accessing vehicle content on their smartphone at the dealership,” says the NADA report. Mobile technology lets consumers compare prices at the dealership.

On the used-car front, availability of detailed wholesale pricing data on the Internet affects dealersê management of their used inventory. It has helped dealers focus on makes and models that are most desirable in their market and most profitable at their dealership.

Used-vehicle pricing has also been affected by the widespread availability of better data. The average spread between the price paid at auction and the retail listing price for a vehicle has dropped from $5,000 in 2008 to $4,000 now. The variability around average listing prices has also decreased.

With all these changes, dealersê used-vehicle margins have improved considerably since the mid-2000s, growing from an average of 11.4 percent before the recession to 13 percent todayãamong the highest used-vehicle margins in nearly 25 years.