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46% of new car buyers want to purchase online

4th March 2011 Print

Recent research suggests that 46% of new car buyers want to buy their car online and have it delivered to their door.

Car buyers have expressed a strong desire for a full end to end experience of comparing, shopping, arranging car finance, completing the transaction and getting the car delivered the same as they would for other ecommerce purchases.

Whilst a car is a big purchase, the online risks are substantially reduced for new cars by the combined effects of manufacturer warranties and distance selling regulations that provide between 7 - 14 days ‘cooling off’ during which a car can be returned. Based on this, some experts suggest that car buying over the internet could reach up to 400,000 cars (£5 billion) over the next 10 years.

Figures from a recent Autotrader survey showed that 33% of 5,000 people interviewed are ready to buy cars and vans online whilst Capgemini’s survey of 8,000 consumers “Cars Online 10/11” found that 46% of people were likely or very likely to buy their new car using an end to end online car buying process. Whilst research suggests there is a demand, what are the underlying needs that are pushing online car buying?

Whilst Capgemini’s research suggests the key drivers for online buying are convenience and price, it may come as no surprise that most British car buyers don’t want to haggle. According to research by Sainsbury Finance, two thirds of car shoppers planning to buy a car in the lead up to March 2011 won’t negotiate hard and will most likely settle for the list price. In this context, the appeal of buying on the web is that the online marketplace enables a consumer to anonymously compare and find the best price for a new car without having to negotiate. This tendency to use the web as a buffer is further reinforced by the fact that test driving the vehicle is not a high priority for many online shoppers. They seem more comfortable with independent reviews than they are taking a test drive and Ford Retail confirmed this when they recently stated that 37% of internet shoppers are prepared to buy cars and vans without test drives.

Interestingly, offline buying tendencies are actually more conducive to online car shopping. As much as 80% of all new cars are bought with finance with lenders funding more than 50% of all cars sold by dealers (c. £12 billion) according to the Finance and Leasing Association. Therefore, car buyers should actually shop for the best deal based on a monthly price and not the list price because a low list price doesn’t always equate to a low monthly price. Indeed, often it can be the opposite. A shopper may find a car with a high list price being sold for a low monthly price.

Mark Peatey, Director at Finance A Car (, a UK website that provides an end to end solution for new car buyers, stated that, “Whilst online car buying is common in other countries such as France, until recently it has not been easy in the UK. Despite the fact that most people want to know the monthly price, online car price comparison has historically been based on the list price which has little to no variation across dealers. However, because there is the potential for a big variation in monthly prices, UK car shoppers are now using the web to get the most competitive car and finance packages and are saving as much as 50% on their monthly payments by comparing the prices for hire purchase, car leasing and loans”.