It’s no secret that the used car market has done nothing but explode over the last two years. With an ongoing shortage of microchips (which are essential to new vehicle manufacturing), triggered by the coronavirus pandemic, the industry saw the production of new cars plummet. This in turn propelled the demand for used vehicles to rocket, with price tags for second-hand cars rising up to 50 percent. And, as we complete the first quarter of 2022, the boom in second-hand vehicle buying is only set to continue over the rest of the year, with the hyper demand for used cars expected to gradually settle as we head into 2023. Despite the disruptions to the sector, the future for new-car dealerships looks hopeful too, with research predicting a rise in sales across the industry.
Not only have manufacturers felt the catastrophic impact of the pandemic but lockdown has seriously changed the way car buyers shop for vehicles. There’s no doubt about it, the pandemic accelerated the digital revolution and within a matter of weeks, our lives were forced online – which meant dealerships had to quickly adapt the way they engaged, communicated, and sold to customers, to suit the current climate. And although we’ve seen the end of social distancing and isolation, the way people are shopping has changed for good, and the automotive industry is no exception. And, although dealerships are once again welcoming customers back in person, the car buying experience is not what it used to be pre-pandemic. Automotive customers are more often than not utilizing easily accessible information online, and want more of a hybrid car buying experience, with a blend of digital and in-person shopping.
But what do vehicle shoppers want when buying their next car? Is there a difference between new and used car customers? Here we explore consumer behavior and how your dealership can best create a sales and marketing strategy shaped around their requirements.
Who makes up the car buyer market?
Before we start it’s important to understand who’s likely to be shopping with you. According to research, the current automotive consumer landscape looks something like this:
- Gen X (41 to 56-years-old), making up around 38 percent of all buyers
- Baby boomers (57 to 75-years-old), making up around 32 percent of automotive shoppers
- Millennials (26 to 41-years-old), making up around 23 percent of consumers
With competition between businesses high, dealerships simply can’t afford to not understand their audiences – instead, create car buyer personas to guarantee consumer engagement, while improving the shopping experience and ultimately generating sales.
The rise in SUV
Across the entire industry, there appears to have been a real shift in demand for SUVs. For the first time in years, sales of sedans are slowing down, and the number of SUVs being sold is increasing. According to industry leads, this trend has been coming, with experts suggesting it’s likely to stick around, and what’s more, continue to grow as we move forward. Dealerships need to be mindful of this.
Why are SUV sales on the rise? There was a time when SUVs were far more unaffordable, seen as a luxury, with their large designs deemed undrivable by some. Nowadays, so many SUVs are looking more like cars, while offering the same practicalities but with additional comfort.
And, with the pandemic encouraging people to spend more time outdoors, in the fresh air (rather than confined in a room, in danger of spreading germs), as well as prompting people to spend more time with their families, and make the most of vacation spots available on their doorstep, it’s no wonder we’re seeing a boom in SUV sales.
Whether it’s a new or used vehicle, shoppers are looking for a car that can get them to the beach on those sunny days but also allow them to escape to the slopes in the winter. Buyers want a car that can house their belongings, family, and perhaps the dog – which means ultimately, they need the space that SUVs can offer.
As always, knowledge is power, and being mindful of this trend could put your dealership in the driving seat. Showcase the SUVs you have available to purchase and what’s more, highlight the features customers are looking for, shouting about their blended package of affordability, practicality, and drivability. For SnapCell users, this couldn’t be easier, with dealerships able to create professional-quality walkaround videos of the cars they have on-site. Better still, staff at your dealership can provide a detailed commentary alongside the video, to really optimize engagement with your customers.
The digital revolution
We’ve mentioned before that there has been a real shift in the way automotive customers shop for vehicles. But is this the same for both new and used vehicle buyers? In short, no.
In fact, used-car buyers seem to spend about 40 percent more time doing their research online ahead of buying a car, than new-car shoppers. What’s more, new-car shoppers, on average, spend less than seven hours researching their next vehicle online.
Here are a number of reasons why used car buyers might rely more on digital research:
The main reason for this – and it comes as no surprise – is reliability. When it comes to new vehicles, brand reputation often speaks for itself, which means research is limited – and quite often mirrors what a shopper will gain from actually visiting a dealership in person. However, with used cars, the reliability of each vehicle can vary depending on things like age and number of previous owners, for example, which means buyers naturally have to research each car more carefully.
A wider comparison
Of course, the internet gives used-car buyers the opportunity to compare cars from across a wider location. In comparison, the need to compare vehicles from further afield isn’t a necessity for new car buyers, as the specification will remain the same regardless of where they shop.
Cautious of car salespeople
It’s important to recognize that used vehicle buyers also tend to be more cautious of car salespeople, according to statistics. As a dealership, it’s worth being aware of this and using features like SnapCell Messenger, or SnapCell Live on the SnapCell app, to build consumer trust, encourage rapport with shoppers and boost your dealership’s reputation.
But don’t be too hasty to disregard online shopping when it comes to new car customers, as the average vehicle shopper is said to now only make just two visits to a dealership in person when choosing a new car – this compares with an average of five, around a decade ago. And, with 63 percent of people discovering new vehicles online and 53 percent of customers deciding on new vehicles using the internet, it’s important that your dealership promises a hybrid shopping experience for all consumers.
And while the statistics demonstrate a shift in shopping behavior, the challenge for your dealership is keeping up with these trends. The SnapCell app is a game changer when it comes to enhancing customer experience, whether it’s buyers wanting a shop totally virtually, or those looking for a hybrid vehicle purchasing journey. At the simple touch of a button, your staff can seamlessly showcase stock or shine a light on certain vehicles via professional-quality videos, ready to use across your digital platforms.
If you’re new to the app or need some inspiration here are a few tips to help your dealership make the most of SnapCell:
- Produce a walkaround clip of a specific vehicle
- Bring the digital buyer inside by showcasing your entire stock in a short video
- Create a virtual test drive
- Create engaging videos for social media, with more than 70 percent of shoppers revealing they find social media useful when buying their next car. Plus, with SnapCell integrating with your dealership’s social media channels, creating a clip specifically for your social media platforms couldn’t be easier.
There’s no doubt about it, you need to be encouraging your customers to be leaving online reviews. Using the internet before buying has never been hotter, and testimonials can play a key role in influencing a shopper’s decision.
In fact, 78 percent of new car consumers and 71 percent of used car consumers admit that dealer reviews play a role in their research process. Reviews are essential to the reputation of your dealership, so encourage testimonials from loyal customers thanks to the app’s ReputationBuddy feature.
Drive sales using SnapCell
The driving force behind the automotive industry at the moment is the internet – regardless of whether a person is shopping for a new or used vehicle. Car consumers are getting back on the road but they’re doing it differently than they were two years ago – and to survive, dealerships need to change the way they engage with shoppers.
Furthermore, dealerships need to be aware that used vehicle shoppers are more likely to use the internet than those looking to buy a new car – with used vehicle customers searching further afield and taking more time (in some cases, weeks), to research their next automobile. Dealerships should be focussing on building trust and rapport with customers, especially those shopping second-hand who are slightly more hesitant of car salespeople.
And with engaging through social media, interacting with customers via live video, showcasing your stock, and encouraging online testimonials, just a few of the benefits of being a SnapCell customer, it seems signing up is a no brainer. Better still, the SnapCell app can integrate seamlessly with your CRM system, making it easier than ever for your dealership to gain a real understanding of the customers you’re engaging with – whether they’re new or used vehicle shoppers. Schedule your free SnapCell demo.