Economic downturn driving consumers to buy cars on the Internet

With the economic downturn looming consumers are increasingly trying to save money on their purchases and are moving online to do so. In a survey by leading online used car retailer Autoquake.com, 44% of respondents reported doing a larger proportion of their shopping online as a result of the economic downturn.

While people have been using the Internet to research their car purchases for a long time, actually purchasing a car on the Internet is a relatively new phenomenon. However, consumers are now increasingly embracing this new way of purchasing a car, driven by the desire to save money. 81% of respondents say they would expect to pay less for a used car on the Internet than through a traditional dealer and 76% of consumers say they are more likely to purchase a used car online now than they were 12 months ago.

“We have seen more than a 260% increase in website traffic from 85,000 to 222,000 unique visitors per month to the autoquake.com website since the credit crunch started to take hold in June. With this growth it looks like 2009 will be the year when buying a used car online will become a mainstream phenomenon. We are currently operating at a monthly sales level that equates to 10,000 cars sold per year, even if we stop growing further. And that is a big number!” says Fredrik Skantze, Chief Marketing Officer of Autoquake.com

Another clear trend is that consumers are willing to widen their geographic search to find the right car with 93% of respondents saying that because of the economic downturn they are willing to travel further to find the right car at the right price. On average, customers purchasing a car online from Autoquake.com live 135 miles away. This is widely different form the typical 5 mile pickup area of a traditional car dealership.

When it comes to the factors that would be most important in convincing consumers to purchase a used car online respondents quoted trust in the seller as the most important factor (quoted by 53% of respondents) followed by low price (21% of respondents) and a good return policy (14% of respondents).

After saving money, consumers quoted convenience as the biggest benefit of purchasing a used car on the internet (quoted by 34% of respondents). The ability to make the purchase decision from the comfort of the home rather than having to travel from dealership to dealership was seen as particularly attractive.

Another benefit quoted by respondents was the ability to transact without having to speak to and negotiate with a sales person (16% of respondents). Consumers say they feel at a power disadvantage when dealing with a professional car salesman and the Internet helps them restore the balance of power by empowering them with the information they need and allowing them to make the purchase on their own terms without anyone pressuring them.