What I learned on Kijiji about how Canadians buy cars
Online research shows consumers know what they want, but price is still king
How do we Canadians buy cars?
Luckily for me, Kijiji Autos has the answer. Driving Change is a survey of 2,000 car shoppers — 1,008 of whom had just bought a car and 992 who were just about to buy a car — that proposes a new norm in car shopping in quite some detail.
Here are some of the study’s (not always surprising) conclusions:
We are still cheap buggers: Pricing is still king among Canadians shopping for cars. So much, reveals Kijiji’s research, that we’ll drive 70 kilometres to save $500 on a new car purchase. Never mind that said 140-km round trip will cost you about $20 in gas — and will continue to do so every time you use that same dealership for service.
Once we get to the dealership, we don’t want to haggle. Only 29 per cent of the consumers “valued the ability to negotiate price at the dealership.” That’s a nine per cent drop since 2017, the single largest change in consumer behaviour recorded in the study. More importantly, 40 per cent visited only one dealership before buying a new car. In other words, pricing may still be king, but Kijiji says we want to do all our negotiating behind an impersonal computer screen. So no conflict please, Mr. Dealership.
What is surprising, however, is that the “total price of ownership” may be more important than just simple transaction price.
Millennials may be the future, but Boomers are still the now of auto
sales: Boomers are more likely than Millennials to buy for want rather than need. Three times as likely, in fact. In other words, while 21- to 38-year-olds are shopping for the Chevrolet Trax and Toyota Corollas they can afford, the blue rinse set is eyeing the fully-loaded car they always dreamed about. They’re also more apt to return to the same dealership for service, as well as buy their next car from the same salesperson.
Car shopping is an online activity:
While consumers typically visit only one dealership, they regularly peruse up to three websites. In fact, 88 per cent of customers use online resources.
Within that sphere, however, things get a little complicated. Social media in general has little influence on the new car purchase decision, with just 12 per cent of consumers listing it as a primary source of information. Instead they use a specific dealer’s website or “auto review sites,” such as, of course, Driving.ca.
Buyers are well informed: Consumers spent up to seven weeks “browsing vehicle types, reading reviews and comparing pricing in 2019.” In other words, the modern consumer knows what car they want and what it should cost before they even step foot in a dealership.
This new, better-informed consumer has challenged new car dealers. Nonetheless, 53 per cent of dealerships surveyed see 2020 as another growth year for their business. But a significant minority — some 10 per cent — think that a more knowledgeable consumer is not good for their business. This is a sticking of one’s head in the sand of the worst kind.
Consumers have made vehicles
better: Dealers can hate “invoice pricing,” but the modern customer has, by forcing the industry to become more accountable, made the automobile better. Cars are more reliable because consumers have access to Consumer Reports and J.D. Power data. New cars are more affordable because everyone knows how much the dealer paid for it. And cars are safer because the internet broadcasts the latest crash test results.
Knowledge, as they say, is power. And right now, if Kijiji is to be believed, it all rests in the hands of the consumer.