The impact of technology on car-buying behaviour: tablet wars

The way people buy cars is changing. Tablet WarsResearch shows that not only are more people tempted to buy used cars rather than new cars, but also that the way customers are buying their cars is changing, causing dealers to alter how they operate. Much of this appears to have been caused by the rise of the internet, but smartphones are playing their part too. Here we take a look at the impact of technology on car-buying behaviour.

What people are buying is changing thanks to the internet

Recent research has shown that the type of car customers are buying is changing, with the market shifting as a result. With changes to the market as a whole, it’s perhaps no surprise that we are seeing a change in car-buyer behaviour. Here’s what the latest data shows.

2013 saw strong new car sales and a higher volume of used car sales combining to push UK car sales back up to pre-recession levels, with 9.7 million cars sold according to the Society of Motor Manufacturers and Traders. Overall, the value of the used car market grew by £4.6 billion to an all-time high of £42.7 billion in 2013.

So what’s causing the rise of the used car market and why are people now more willing to buy used cars? The answer could be technology, with an increasing number of people citing ‘internet shopping/consumer sites’ as a powerful influence when deciding what car to buy next.

Sixteen per cent of those surveyed by TNS BMRB stated that internet shopping was an influence on the type of car they considered buying, while more people (11%) listed classified used car websites as an influence than used car showrooms/sites (10%). As expected, those aged between 17 and 24 were twice as likely to be influenced by social media campaigns on Twitter and Facebook as any other group surveyed.

But why? The rise of PCP allows people to buy premium

Many believe that the growth of the used car market is because of the rise of personal contract purchases (PCPs), with Experian’s data showing that the number of PCP deals in the UK in 2013 grew to 187,000, from only 50,000 in 2011.

This is because the buying habits of consumers are changing and, as such, dealers are adapting to secure custom. PCP is allowing customers to think more about affordability in the long term, rather than focusing only on the ‘sticker price’. As such, more people are willing to buy a used luxury car, rather than a new car from a volume brand.

With a number of brands – such as Porsche – offering warranties or service plans on used vehicles, more people are shifting from a mentality where the vehicle they’re buying has to be new, and are warming to the idea of buying used.

As part of this, it seems clear that the emotional attachment to a premium brand is outweighing the aspirational value of a brand new car, with warranty offers allaying customer fears. This, it is believed, changes the car market completely.

The rise of online changes shopping dynamics

As well as the customer changing, and the willingness of the customer to buy old rather than new, it appears that the way the customer finds their next car is also shifting. More and more customers are turning to internet sites to find their new vehicles.

It appears that many buyers are now happy shopping on the internet because search engines allow them to uncover ‘tricks of the trade’, helping to teach them how to negotiate with dealers and find the car they want. As such, most customers are now expecting an increased amount of honesty and transparency when buying their new car.

The growth of online hasn’t only affected customer buying power – it has also affected the way that garages, franchises and dealers operate. As part of this, many dealers are now looking at multi-faceted ways to draw customers to their garages, including moving cars around the country and moving them between their garages.

With the growth of online, dealers are also having to think more consciously about how they market their vehicles, including using online sites like AA Cars. As such, the way that cars are photographed, videoed and described plays a very large role in their marketability and the likelihood of a sale, with the use of contact information and vehicle statistics also vital.

Mobile’s the next stage

Alongside the growth of online bolstering the used car market, the growth of mobile has also had an impact, and this only appears as though it will grow further in the future. For example, AA Cars has seen a large spike in the number of people accessing us through mobile phones and tablets in the past year.

With traffic from iOS devices up by 44%, Android traffic up by 56% and Windows Phone traffic up by 167%*, it’s clear that more and more people are using their phones and tablets to search for their new vehicle. This remote access to a database of vehicles also means that customers are able to transform the used car market to one that’s 24/7, as it allows them to browse at their leisure, even when dealers are closed.

As part of this, when looking at granular data, it is clear that iOS still dominates as the leading mobile platform for used car searches, but Android is catching up, leading to a more balanced marketplace and a version of ‘tablet wars’.

The battle between dealers, online portals and app providers for this mobile revenue will likely be key for the market going forwards. With the growth of apps, mobile-friendly websites and differing operating platforms, it’s perhaps unsurprising that many companies are investing in making their websites mobile friendly and creating apps.

There is very little evidence to confirm that ‘traditional’ car buying techniques are losing their persuasion; however, the growth of both online and mobile is vital to the sector going forwards. Are you ready to take part in the upcoming ‘tablet wars’?

*Data shows % increase from October 13-14 and October 14-15

Image courtesy of Shutterstock


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