Gartner Survey Shows U.S. Consumers Embrace the Internet in Their Used Vehicle Buying Process
14 August 2000
Survey of 40,000 Households Shows More Than One Third of All Used Vehicle Purchases Facilitated by Internet
San Jose, Calif. - The Internet is becoming more prevalent for used automobile buyers, as a Gartner Group, Inc. survey revealed that 32 percent of all U.S. households that purchased a pre-owned vehicle from September 1999 through March 2000 used the Internet in their buying process.The survey of 40,000 U.S. households showed that used car buyers primarily shop online: 31 percent of the households used the Internet to shop for their pre-owned vehicle, while 1 percent purchased their pre-owned vehicle online. Compared to last year, the percentage of online used car shoppers grew by almost 50 percent, while the percentage of online used car buyers virtually doubled.
Households are still less likely to use the Internet in their used vehicle buying process than in their new vehicle purchases. However, with the proper assurances on quality and warranties, consumers will become more comfortable using the Internet to shop for and buy a used automobile online.
Asked to indicate how likely they are to use the Internet in their next used vehicle purchase, 36 percent of all households responded that they are "very likely" and 44 percent are "likely or very likely" to shop for their next used vehicle online.
"Typical for used car buyers is that they want to be able to choose from a large inventory of vehicles in order to find the ideal car with the exact specifications at various price points. This is where the Internet shows its strengths - the Web addresses the consumers' needs in a convenient and extremely efficient fashion by allowing consumers to browse through extensive online pre-owned vehicle listings," said Thilo Koslowski, senior analyst in Gartner's e-Business Services group with responsibility for the automotive vertical market.
Similar to new vehicles is the consumers' increasing interest in buying their next used vehicle online. Gartner's study showed that 5 percent of the households indicated that they are "very likely" and 8 percent are "likely or very likely" to buy their next used vehicle online - an extraordinary increase compared to the number of households that purchased their recent used vehicle online.
"The consumers' growing comfort level and the online retailers' increased focus on ensuring transaction reliability and vehicle warranties is beginning to shift the consumers' Internet usage from shopping for a used vehicle to actually buying it online," Mr. Koslowski said. "In order to create an online equivalent for 'kicking the tires,' Internet retailers should continue to address the credibility and trustworthiness factors of buying a used car online.
Online used car buying services will have to invest significant resources, both online and offline, and concentrate on establishing the right partnerships, such as third-party certification programs, that will help to produce a positive buying experience for the Internet customer."
Mr. Koslowski will provide additional analysis on the Internet's impact on the automotive industry during Gartner's Symposium/ITxpo 2000, October 16-20 in Lake Buena Vista, Florida. This event is the IT industry's largest and most strategic conference providing business leaders with a look at the future of IT. Some of the speakers at this year's event include Hewlett-Packard's chairman and CEO, Carly Fiorina; Sun Microsystems' chairman and CEO, Scott McNealy; and Microsoft's president and CEO, Steve Ballmer.
Additional information on the automotive online industry is available to subscribers of Gartner's e-Business Services. These programs are part of a wide range of Gartner services examining the e-business industry. These programs are designed to help senior executives, strategic planners and investors capitalize on emerging opportunities by providing research and analysis on electronic commerce and Internet marketplaces.
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