Key Takeaways

Sources: Dig Insights, Vehicle Path to Purchase Research Study, August 2024, (n=1,229). * Comscore My Metrix® | Key Measures, Multi-Platform, Total Minutes, August 2024, Canada. | Automotive Resources Share of Minutes., May 2024, (n=325).

While car purchase intent has maintained its course, with about one-quarter of Canadians planning to buy a vehicle in the next six months, our latest consumer research revealed that confidence in personal finances made a notable improvement, with 53% of vehicle intenders anticipating to see their household financial situation improve either “a little” or “a lot” in the next six months. That’s up from 43% in the previous study. With these strong indicators of purchase intention and financial confidence, dealers who understand how and where consumers shop, and who then tailor their online experience to those preferences, will have an advantage.  

Also unchanged is the percentage of respondents who have previously planned to buy a vehicle but then determined to delay their purchase. The primary reason for delay is the belief that their current vehicle is still in good running condition (52%). Second is high vehicle prices at 31%; and tied for third is affordability, and re-prioritization of spending due to inflation or the increase in cost of living, both at 25%. Most notably, there was a slight drop in people who said high interest rates prevented them from purchasing at 18%, down from 22% earlier this year.   

What about those who don’t want to wait? The study found that 47% of vehicle intenders feel “now” is a good time to make a major purchase, including a vehicle, and while only 31% feel the current economic situation “good” or “very good” overall, when it comes to confidence in their current personal financial situation, 59% state it was “good” or “very good.”  

Online resources remain the number-one source of vehicle information, and by a vast margin over in-person dealership visits or asking family or friends. One of the top sources that consumers look to are online automotive marketplaces (38%), such as gotrader.ca. Those looking for new vehicles use an average of 3.6 sources, while used vehicle intenders – 52% of whom turn to an online automotive marketplace – tap into 3.8 sources, on average. Putting vehicles in front of these car shoppers, where they are – online – is a key formula to success. 

What they’re looking for online is also important to help you tailor the process and provide the experience they want. A whopping 86% of shoppers are interested in completing certain aspects of their purchase process online, and 64% want to buy a vehicle fully online. That’s remained rather stable from the previous study. 

The current research showed the tasks that most shoppers want to do online are to research and compare vehicles (92%), and to inquire about a vehicle that interests them (92%). Unsurprisingly, those two undertakings haven’t changed positions for several studies. The keys to reaching these shoppers include a wide variety of vehicles on your lot, keywords that prioritize vehicles presented to them by model, segment, brand, or price, depending on what the shopper has indicated, complete information that’s easy to find, including vehicle comparisons, and finally,  promptly responding to their inquiries, and with information about the vehicle that’s already been shortlisted by the shopper. If you’re looking to improve your merchandising, or understand if it’s up to par, check out this guide to effective online vehicle merchandising. 

Other aspects that shoppers are interested to conduct online include arranging for vehicle delivery (84%), obtaining a valuation for a trade-in (83%), scheduling an at home test drive (82%), and to pre-qualify for financing (81%). Services like AutoTrader’s Instant Cash Offer (ICO) and Deal Builder enable dealerships to deliver on these preferences, moving shoppers further down the funnel, several steps closer to purchase. 

How customers want to pay for their purchases remains unchanged over past studies. Overall, 49% of vehicle intenders plan to finance, with 38% of those looking at dealership financing; 43% from a financial institution; and the remainder intend to leverage a line of credit. Some 35% want to pay cash, while 16% prefer to lease, up from 14% in the first quarter of 2024. Financing is highest among new vehicle shoppers at 57%, while those looking for used vehicles are split almost equally between 43% who want to finance and 44% who prefer to pay cash. Leasing between the two isn’t all that far apart either, with 17% of new vehicle intenders and 14% of used vehicle shoppers demonstrating a preference for this option.

Consumers are confident, the Bank of Canada recently lowered its interest rates, and many Canadians are poised to make major purchases. Strategically tapping into the tools that put the right vehicles and their information in front of your prospects, and let you reach out promptly when they’re interested, while delivering on their shopping preferences, are the keys to turning vehicle shoppers into vehicle buyers. 

Key Takeaways

• Consumer confidence in their personal finances outlook is the highest it’s been since May 2023
• Online remains the top source amongst car shoppers for sourcing vehicle information, with online automotive marketplaces remaining the primary source for used vehicle intenders
• Almost half of consumers intend to finance their vehicles, including dealer financing
• A majority of shoppers want to complete some aspects of the vehicle purchase process online

Sources: DIG Insights Car Shopper Perceptions & Intentions Research Study, May 2024, (n=325).

Looking at consumer shopping behaviours, research is still primarily conducted through online automotive marketplaces, with 50% of used car shoppers stating they leverage marketplaces like gotrader.ca when shopping for their next vehicle. Dealership websites come in at 34%, while 30% of consumers say they regularly use manufacturer websites. Taking advantage of promoting your inventory where consumers are looking puts your vehicles in front of the highest volume of shoppers at important phases of the path to purchase. 

Not only is it important to know how consumers discover vehicles, but you need to understand what elements of the purchase they want to do online, enabling you tailor your offering accordingly. Ninety percent of intenders said they want to complete parts of the buying process online, consistent with results from the previous study. However, there has been a 9% increase to the number of shoppers who are interested in some degree fully purchasing a vehicle online, now reaching 69%. 

The top elements car shoppers want to complete online have remained stable, with 97% engaging in research and comparing vehicles, 91% inquiring about a vehicle, 86% arranging a home test drive, 85% organizing delivery, 82% intending to pre-qualify for financing and 82% getting a trade-in valuation. Unique services like AutoTrader’s Instant Cash Offer (ICO) and Deal Builder can get you one step closer to aligning with consumer preferences and successfully converting shoppers into buyers.   

When asked about their confidence in their current personal financial situation, intenders rated this aspect at 77, which is similar to the previous result. Their confidence in the economy has risen from 35 last year to 44. When asked to rate these aspects over the short term outlook – the next six months – consumer confidence in their personal finances is at 73, while their confidence in economy increases to 58. With rising levels of confidence, it continues to be important to put your inventory in front of consumers as they shop for their next vehicle. 

The impact of external influences on consumer intent to purchase a vehicle has fluctuated slightly. Inventory shortages are slightly less of an issue than they were last summer at 64%, as are gasoline prices at 67%. Inflation has remained about the same at 75%, but surprisingly, intenders are less influenced by vehicle prices, 81%, and high interest rates, 74%. The bottom line is that they want to buy a vehicle, and there aren’t a lot of serious concerns that are going to stand in their way of their intent to follow through with this purchase. 

Overall, when facing all economic factors, including inflation, vehicle prices, interest rates, to name a few, the top action taken by the vast majority, (67%), of intenders impacted by at least one of these factors, is to comparison-shop to find the best deal. Because of high vehicle prices in particular, 40% of people spend more time comparison-shopping, which is on par with last summer’s result. Coming in very slightly behind are the number of people who may reduce their budget or delay their vehicle purchase, but that is down by seven points, from 45% last summer to 38%. While car shoppers naturally seek the best deal, they do intend to buy now rather than waiting any longer.   

Understanding how and where consumers are looking for their next vehicles is vital in a climate that’s returning to previous levels of consumer confidence, and their desire to buy the vehicles they want, instead of what they must settle for. Having the online tools in place to streamline the car purchase process is becoming increasingly more essential to finalizing any potential deal.  

Key Takeaways

• Intentions to buy a vehicle remain steady amongst Canadian shoppers.
• Online automotive marketplaces continue to be a top source used amongst Canadian car shoppers.
• Appetite to conduct elements of the vehicle purchase online are rising
• Consumer confidence and outlook on the economy is stable since the summer of 2023.
• Factors affecting the industry are causing shoppers to spend more time price-comparison shopping.

Sources: DIG Insights Car Shopper Perceptions & Intentions Research Study, February 2024, n=305

New vehicle intenders are more likely to finance, at 56% compared to 44% amongst used car shoppers. Those looking to buy a new vehicle are also less likely to pay cash, and a mere 12% say they intend to lease, versus 16% of those shopping pre-owned offerings.

Dealers are encouraged to leverage these findings to help fine-tune their strategy. While many car buyers are intent on using dealership financing options, there are those that may be intimated by it – especially since, in their online vehicle research, they may come across social media personalities who “fish for clicks” by claiming they’ve unearthed common dealership tactics to pad contracts and prices. Dealers looking to bring more efficiencies, build more loyalty with consumers and tap into one of the largest automotive finance networks can lean on Dealertrack’s lender solution software for all the tools they’ll require.

Automotive dealerships can bolster consumer confidence in their purchase decision by identifying and explaining all finance options up front. Being flexible is also key. Understanding car shopper hesitancy and leveraging this knowledge to present a variety of options to prospective buyers, such as budget friendly models or different financing terms, is the path forward to ensuring customers can find a vehicle that aligns to their needs, rather than deferring the purchase altogether. And even if customers plan to use their own financing, it never hurts to run the numbers to see if you can offer payments that better align to their financial situation.

Dealers advertising on gotrader.ca have added benefits of providing transparency to shoppers through GoTrader iQ Price Badges, an effective tool at identifying how each vehicle is priced compared to fair market value. Additionally, consumers can leverage the Payment Calculator on Vehicle Details Pages (VDP) to investigate their payment options ahead of connecting with the dealership, driving more informed shoppers to your lot.

Key Takeaways

• High vehicle prices can impact purchase decision, but many car shoppers will entertain other options rather than defer their purchase altogether
• Half of consumers plan to finance their car purchase, and dealership financing is a top choice
• Most consumers are confident about their current financial situation, a key factor in their finance payment options
• Being transparent with pricing and finance options can help bring confidence to buyers and seal the deal

Source: DIG Insights Car Shopper Perceptions & Intentions Research Study, May 2023, n=305

In consideration of the survey findings, it’s more important than ever before to get your used inventory listed on online automotive marketplaces. Those at the outset of their car buying journey visit an average of 3.8 sources when shopping, but the sources used depend wholly on what they’re considering. Among new car shoppers, 48% visit manufacturer sites, versus 39% using online automotive marketplaces. With consumers interested in used vehicles, 55% frequent automotive marketplaces, while 33% browse automaker sites.

Overall, car buyers remain active and primed to purchase – so do your part to ensure they’re making their way to purchase through you!

Key Takeaways

• Despite impacts to the economy, purchase intentions are rising among car shoppers
• Used car intenders use automotive marketplaces as their top online source, making it imperative that your inventory is available for them to browse
• Consumers have high confidence in their current financial situation, understanding their financial confidence is key to ensure you can share the most relevant and attractive payment options
• Understanding what could impact a purchase can help seal the deal, be transparent with the descriptive text you populate to your listings and seek to gain a firm hold of consumer concerns or hesitations about finalizing their purchase

Source: DIG Insights Car Shopper Perceptions & Intentions Research Study, May 2023, n=305

Key Takeaways

• Educate consumers and prospective buyers on the different types of EVs available in the market
• Ensure your customers understand their charging station options, including the availability and benefits of at-home charging
• Outline cost, maintenance and environmental benefits when owning an EV
• Share the latest range per charge, based on current market offerings

Source: Electric Vehicle Research, March 2023 (n=1,332)

According to our Vehicle Path to Purchase Study, the primary drivers for experienced buyers to shop for a car are a desire to upgrade or because their current vehicle is dated. With first-time buyers, the main triggers are avoiding public transit (32%) and ridesharing services (21%), or, because they’re in the process of starting or switching jobs (21%). Necessity is as much of a factor as desire, if not more.

Not surprisingly, first-time buyers are more likely to be younger, with lower earnings, on average, as compared to experienced buyers. They are predominantly single or a young couple without children – factors that play a role in their purchase preferences. While the largest segment of experienced buyers have their sights set on a SUV (45%), first-time buyers were more likely to purchase a sedan (38%) , with SUV’s coming in second (34%). Some gravitate towards an electric vehicle (EV), however, the numbers remain slim at 9% for first-time buyers and 6% with experienced buyers. Overall, first-time and experienced buyer segments are near identical with respect to the breakout of their preference for a used or new vehicle.

Both segments use the same resources throughout the purchase process, with nearly the same weightings across each of these. At the top are online automotive marketplaces (63%), followed by dealer websites (36%), manufacturer websites (32%), and online videos (23%). Half of both buyer types are equally likely to visit a dealership and test-drive a vehicle, however, only 1 in 10 first-time buyers visit without a test-drive, as compared to 23% of experienced buyers. Those purchasing a car for the first time are also far more likely to ask their friends (44%) or family (45%) for advice.

Among the criteria that plays a part in their purchase decision, price is the primary factor, at 71% for both buyer types. Fuel economy is also high up in the ranking order, coming in at 48% across both camps. Both cohorts are also neck and neck when considering brand (43%), availability (40%), and safety (34%), however, first-time buyers are far less concerned about vehicle comfort (31%), styling (28%), or available features (19%). Dealers are likely to be most successful in positioning price and ownership cost within their pitches to first-time owners, as opposed to overemphasizing the features available in the vehicle.

There are significant differences between these two groups in terms of how they initially become aware of the model they eventually purchase. Social media advertisement = is a key channel for 35% of first-time buyers, versus 23% of experienced ones.

As they progress through the funnel, first-time buyers also find many of the lower stages increasingly difficult. Compared to experienced buyers, they are far more likely to struggle with feeling confident they got a fair deal. The first-time buyer sees nearly all aspects related to the purchase process a hurdle to overcome, including price comparison (59%), establishing a budget (52%), deciding on an extended warranty (51%), weighing insurance costs (50%), choosing a dealership (47%), selecting vehicle accessories (44%), identifying the most appropriate vehicle type (41%), deciding on buying or leasing (44%), and getting approval for financing (35%).

Where first-time buyers further distinguish themselves from those who have amassed experience with the process is their level of trust surrounding the accuracy of financing specifics conveyed to them by dealers. They are also more likely to make a down payment, which averages around $8,100.

To support first-time buyers as they progress through each stage of the car buying journey, dealers should concentrate their efforts in engaging these purchasers through the most appropriate channels, and once interest transitions from their online presence to bricks and mortar, demonstrate a heightened understanding of their unique preferences, the confines of their budgets, and providing the necessary handholding to successfully drive them over the finish line.

Key Takeaways

• First-time car buyers turn to online automotive marketplaces as their top information source, be sure you have your inventory front and centre
• First-time buyers will spend more time in their car buying journey, thus patience is imperative, however, they’re also more willing to put their trust in you
• Social advertising is the key channel where first-time car buyers become aware of the make and model of the vehicle purchased
• Most first-time buyers are younger, with lower incomes – invest the necessary time to understanding their budgets and help navigate them through the financing process
• Many young buyers are looking for basic transportation – present vehicle features as part of the value proposition, rather than a “wow factor”
• First-time buyers may see a challenge in researching a vehicle – advertise vehicles with as much information as possible, especially if they’re basic models, which often don’t have full specs alongside on a lot of sites
• First-time buyers want to test-drive vehicles, so make sure they can do so when they come in

Source: DIG Insights Vehicle Path to Purchase Research Study August 2022, n=1369.

Purchase intentions unscathed by economic uncertainty

Despite economic uncertainty, consumer purchase intentions increased. The majority of gotrader.ca car shoppers surveyed in November of this year rated their household finances as “Good” or “Very Good” (60%), while only 10% reported “Poor” or “Very Poor”. Nearly a quarter of shoppers intended to buy a vehicle within six months (24%), up from 18% in March of 2022.

Even if the market worsened, 60% of new car shoppers and 40% of those interested in used would still buy a car, and about half intended to spend what they had originally budgeted. The bottom-line is that no matter the state of the economy, cars remain a necessity for Canadians.

Online marketplaces a mainstay as the primary resource for car shoppers

According to our Vehicle Path to Purchase study, 45% of new car buyers and 78% of used car buyers use automotive marketplaces from the very onset right through to the close of their car buying journey. Marketplace visitation also ranks high across both cohorts, with an average of 9.4 visits for new shoppers, and 15 visits for used shoppers.

Most spend more than an hour each time they frequent an online automotive marketplace, comparing vehicle prices, examining features and reading online reviews. The majority of car shoppers spend 3 months in their journey, from initial research to finalizing the purchase.

Price is top of mind for used and new car buyers when considering a purchase, followed by brand reputation, fuel economy and vehicle availability.

Experience is also influential with car shoppers, as 40% of used buyers favour a fair price and amazing customer experience, over the best price with a lackluster experience. It appears crucial for dealer operators to prioritize these elements of the online and in-dealership experience to ensure shoppers are primed to put ink to paper when they do visit your store.

Transforming shopping behaviours

Although the microchip shortage continued to affect the industry, car buyers had become increasingly aware of it and were willing to adapt. They anticipated longer wait times for a new vehicle delivery, didn’t expect incentives or negotiation to play a part in the purchase process, and thought it would be tough to find pre-owned vehicles.

The research also found that new car buyers were more likely to purchase a car without a test drive. Almost a quarter of all shoppers were willing to exceed their initial budget by $2,000 to $4,000 if necessary and would travel farther – even out-of-province – to get the right car. More than half would spend an extra two to four hours a week perusing online automotive marketplaces. With 64% desiring a price comparison tool and 31% seeing value in vehicle reviews, offering these tactics within your dealership website represents a competitive advantage.

Car shopper interest in electric vehicles ramps up

Currently electric vehicles (EVs) only represent a small slice of the Canadian market, but an GoTrader survey in March of this year uncovered that 55% of shoppers believe half the vehicles on the road will be electrified within 10 years. Most people don’t drive electric, however, 68% would consider buying one. The majority of those who demonstrate interest in an EV would choose a Battery Electric Vehicle (BEV), rather than a Hybrid Electric Vehicle (HEV) or a Plug-in Hybrid Electric Vehicle (PHEV).

Examining top brands, Tesla is most desired by Canadian shoppers, followed by Toyota, Hyundai and Ford. Among the top reasons buyers would choose an EV, 89% cite fuel efficiency, while 51% point to lower maintenance costs. Dealers offering new or used EVs could have an edge over their competition but, as we are in the early stages of the adoption curve, consumer knowledge gaps are evident, thus bridging the gap with educational content surrounding EVs is a must for car dealers.

Common car shopper challenges and preferences you need to know

Looking back to February of 2022 we checked in with consumers to better understand their preferences and any challenges they may face when car shopping. Our research found most respondents had bought more than four vehicles in their lifetime, but only 27% were very familiar with the car buying process. Only 12% of shoppers visit a dealership early in the buying journey, with most doing so midway or late in the process – primarily because they do most of their research through online automotive marketplaces.

Half of the car buyers surveyed had trouble negotiating price and financing, as well as assessing a used vehicle’s history and condition. They demand straightforward online information, including payment and finance options, and vehicle history and condition reports. Car shoppers also see tremendous value in testimonials from owners and reviews from automotive experts, delivered in a more engaging format, video. Unsurprisingly, buyers want to trust the brand and the dealer, to ensure they’re getting a good price.

Key Takeaways

• Vehicle purchase intentions remain steady regardless of economic shifts, continue to invest in your marketing efforts and inventory replenishment
• Automotive marketplaces are a mainstay as the top resource for car shoppers, so be sure your inventory is present where they are online
• Experience trumps price, providing your customers a quality experience across every touchpoint with your dealership is key
• Car shoppers are willing to transform conventional shopping behaviours, due to the supply and demand imbalance, offer them alternative options to get a deal closed
• Investigate the feasibility of growing your EV inventory to match the lift in consumer interest and demand
• Vehicle affordability is top of mind for Canadian car shoppers, along with vehicle information, keep your merchandising up to snuff to help your inventory listings convert

Key Takeaways

• The majority of consumers have a positive view of their financial situation
• Car shopper purchase intentions and budgets remain steady despite economic situation
• Continue to invest in replenishing stock, as well as inventory marketing and promotion
• Understand your customer’s needs/concerns to make them feel confident doing business with you

Source: Impact of the Economic Situation in Canada on Vehicle Purchase Intentions, DIG Insights, October 2022 (n=456).

From the time the consumer embarks into the research stage of a vehicle to the point they finalize the purchase, this study found that majority complete their car buying journey within 3 months. The purchase duration tends to be shorter for used vehicle buyers, with 33% spending less than 1 month while only 23% of new car buyers indicated spending less than 1 month to complete their purchase journey.

By considering how car buyers manage their vehicle path to purchase, you can prioritize your dealership’s awareness and educational campaign efforts aligned to the inventory you have in stock. More specifically, examining the impact of channels leveraged to educate consumers on a specific vehicle make and model, social media is identified as a key platform. Second to social media are automotive marketplaces, which is where consumers conduct the bulk of their research, thus the channel plays a vital role in influencing purchase decisions.

As we’ve seen time and time again, price is the top criteria considered by buyers of both used (77%) and new vehicles (65%). Other areas of consideration are the brand, specifically brand reputation, fuel economy and availability. For used buyers specifically, 59% say that mileage plays a role in their selection and 37% consider vehicle history. Used buyers tend to be more inclined to have the price drive their decision while new car buyers show more interest in the feature-based specifications of a vehicle to help make their decision. This comes as no surprise since they can customize their features when purchasing a new car. If you’re of the mindset that there’s an opportunity to improve your vehicle merchandising efforts to include these criteria, check out this article detailing best practices to consider.

Online marketplaces have remained the key touchpoint and resource – used by 78% of pre-owned vehicle buyers and 45% of new car buyers. Once they’ve browsed the inventory available on marketplaces, 80% of used buyers and 60% of new buyers find them to be influential on their final purchasing decision. Your listings must be punchy to grab a viewer’s attention, and then include detailed information to keep them engaged. Other vital online touchpoints include dealer websites and manufacturer websites, so it’s important to be visible and consistent across multiple platforms.

Buyers visit an online automotive marketplace multiple times in their purchase journey – on average, 15 times for used car buyers and 9.4 times for new. Consumers most routinely leverage online marketplaces to compare prices and features, monitor deals, and search for online reviews. The majority spend over an hour each time they frequent a marketplace, thus keeping them engaged and informed is vital. They continue to research vehicles through automotive marketplaces even after they’ve visited the dealership. Their path is not linear, making marketplaces that much more important across all stages of their purchase journey.

Car shoppers cite a variety of challenges in finding a good deal and negotiating a fair price. New car buyers are most concerned with the vehicle’s availability and price, while used car shoppers prioritize knowledge of the vehicle’s history and condition.

When you connect with your buyers, your prowess with servicing the prospective car buyer represents everything to consumers. Although some respondents were fine with “the best price but a lackluster customer experience”, the majority of new and used car buyers prefer “a fair price and an amazing customer experience”. You can improve your customer service efforts from several angles, such as speedy lead response time, educated staff to reply to consumer inquires and transparent pricing to help build consumer trust.

As we continue to research car buyer behaviours, we observe noticeable shifts combined with mainstays. Automotive marketplaces have continued to outrank other resources at each stage of the car buying journey, with price identified as a top decision factor for both used and new car shoppers. However, as we dive further into the research, there are differences in the desires and needs of used and new car buyers, thus the service and experience you provide must be precisely tailored to them. No matter where they are in their journey, paying attention to every step of a customer’s vehicle path to purchase is sure to pay dividends.

Key Takeaways

• Majority are purchasing vehicles within 3 months. Used car buyers tend to purchase within a month, while new buyers are spending more time, 2 to 3 months.
• Price is the top criteria used to make a vehicle selection; leverage your GoTrader iQ badges to understand if you are pricing according to market value.
• Price is also one of the most challenging aspects of the purchase process, with both new and used buyers concerned if they are getting a good deal; be transparent in your pricing to instill trust in buyers.
• Online automotive marketplaces are a key touchpoint, used multiple times throughout the purchase process, even after the dealership visit; ensuring your inventory is present and well merchandised is vital to success.
• A majority of buyers find the sources they use to research vehicles to be influential on their purchase.
• Superior customer service and a fair price is more important to buyers than having the best price but a lackluster experience; ensure your staff is equipped to provide the best possible service experience to every prospective customer.

Source: DIG Insights Vehicle Path to Purchase Research Study August 2022, n=1369.