While the pandemic remains a concern for some Canadians, the general outlook for most consumers is that the COVID-19 situation is improving, and they’re ready to return to normal life, which includes car shopping. The online shopping tools that were a necessity during pandemic restrictions have now become the method of choice for the majority of Canadians for at least some aspects of the car buying process. It remains a mainstay even though consumers can now freely visit dealerships.

At gotrader.ca, we continue to examine car shopping trends as they relate to the effects of the pandemic. Overall, car shopping amongst Canadians has remains stable through waves of COVID variants, including the intention to buy a vehicle in the next six months. Seven out of ten car shoppers.ca believe the pandemic situation is improving, which is a substantial gain over previous waves. Consumer confidence is steadily improving, and Canadians want cars.

Throughout our ongoing consumer research, it has become abundantly clear that car shopping behaviour is constantly in flux. From how consumers shop, to where they shop and their preferred tools and resources, these factors often vary. In our latest study we turned to gotrader.ca car shoppers to understand their car buying process preferences and behaviours to help you pivot and better align to consumer needs in 2022.

We opened the study by asking car shoppers on gotrader.ca how many vehicles they’ve purchased throughout their lifetime. The majority of respondents, 71%, have personally bought more than four vehicles. Of those surveyed, 27% state they know the car buying process through and through, while 39% are somewhat knowledgeable. What’s interesting is that although most of these shoppers have been through the car buying process, there remains room for improvement to provide them with more resources and education, which we touch on further into the results of the study.

With 2021 in our rear view mirror, many people are looking forward to a fresh start after a tumultuous year, characterized by ongoing pricing and availability shifts in the market. As we’ve turned the page and rung in 2022, gotrader.ca took a look back at what was a big year in the Canadian automotive industry.

Every year, gotrader.ca, Canada’s largest automotive marketplace, mines and analyzes its site search data to capture the pulse of Canadian car buyers’ interests. The exercise produces the Top Searched Vehicles list, which provides a current view of the most popular cars among Canadians, as well as a glimpse into evolving consumer preferences across the country.

The marketplace search data found that while consumer brand loyalty seems to be enduring through the pandemic, 2021 also marked the beginning of a number of new trends in how Canadian car buyers approach their car-shopping journey.

In 2021, the impact of the COVID-19 pandemic was profoundly felt in the automotive sector, most notably in the global supply chain squeeze that led to a widespread shortage of microchips. This shortage strained new car inventory and resulted in  record high prices for new and used vehicles in the Canadian automotive marketplace.

Yet, despite that reality, luxury and mainstay car brands remained the top vehicle choices for Canadians in 2021. AutoTrader’s 2021 Top Searched vehicle list revealed that perennial favourites, the Ford F-150, Ford Mustang and BMW 3 Series, held strong as Canada’s top three vehicles for the second year in a row.

In order, the top searched vehicles in Canada in 2021 were:

1. Ford F-150
2. Ford Mustang
3. BMW 3 Series
4. Porsche 911
5. Mercedes-Benz C-Class
6. Honda Civic
7. Toyota RAV4
8. Mercedes-Benz E-Class
9. Chevrolet Corvette
10. BMW M

The global microchip shortage stemming from a variety of COVID-19 and trade-war related production disruptions, that has impacted supply chains across the world including the automotive sector, is very much top of mind with Canadian car shoppers.

In fact, according to an online study of over 500 gotrader.ca and AutoHebdo.net marketplace auto intenders conducted in June 2021, 9 in 10 respondents said they were aware of the shortage and 78% said they expected it would have some impact on the automotive industry as well as market.

Among Canadian car shoppers, the most highly perceived effect of the microchip shortage is that dealerships will have less selection of new vehicles and prices will be higher. Specifically, 84% of respondents said they expect to see less selection of new cars on dealership lots, and 71% anticipate encountering higher than normal prices. Further, 65% believe there will be less room to negotiate and 57% believe there will be fewer purchase incentives and promotions due to the supply squeeze.

Interestingly, consumers astutely anticipate used car pricing and inventory will be affected by the global chip shortage in much the same way, as demand for used vehicles will be driven up by the decrease in supply for new cars.

What should be of particular interest and reassurance to dealers is that according to the research, Canadians are willing to go the extra mile to purchase a car. Nearly one third of prospective shoppers said they are willing to pay more for a new vehicle due to the microchip shortage.

Many are also willing to make adjustments to their vehicle shopping strategy to address the challenge. This includes 42% of respondents who would be willing to travel further to purchase a vehicle, with 31% open to travelling more than 400 kilometers to find the right car. More time spent comparison shopping for vehicles on online marketplaces like gotrader.ca is something 35% of consumers anticipate doing as a direct result of the microchip shortage, with nearly half (49%) expecting to spend an additional two to four hours a week comparing vehicle offers online.

The temporary decline in supply of new vehicles has also prompted 27% of car shoppers to be willing to switch from purchasing a new vehicle to purchasing used, and 20% are willing to cross-shop between makes and models.

Finally, when asked what would help make their car buying experience better in the face of the microchip shortage, nearly half (49%) of respondents said that having access to a price comparison tool to help them determine a good price for a vehicle would be most beneficial.

Receiving direct updates on the microchip shortage and its impact on the automotive marketplace was cited by 22% of respondents as being beneficial to their car buying experience.

In conclusion, it is fair to say that this most recent consumer study demonstrates that Canadian vehicle buyers are well aware of the challenges being posed to the automotive industry by the global microchip supply drought and that they are prepared to adjust their shopping behaviours accordingly. In knowing this, it would be beneficial for dealers to fine-tune their marketing and customer service strategies to provide prospective buyers with valuable information to help them along the vehicle purchase path.

The broad economic impact of the ongoing global pandemic notwithstanding, electric vehicles (EV) have captured the spotlight in the global automotive marketplace, with auto manufacturers introducing new models in all EV categories, from pure battery-powered electric vehicles (BEV) to hybrids, at a frenzied pace. Government incentive programs and media hype are also major forces continuing to drive consumer curiosity and awareness in the category.

But just how far does Canadian consumer interest in EVs actually extend to purchase intent and what are the factors ultimately influencing an EV purchase decision?

To shed some light on these questions, we conducted a national online study with gotrader.ca and AutoHebdo.net marketplace users this spring to uncover insights on Canadian consumer perceptions of EVs, specifically, what motivates their interest and informs their decision-making in purchasing an EV. More than 700 people across Canada responded to the survey.

Among the key findings of the study, we found that while 92% of respondents do not currently own an EV, nearly two-thirds (64%) of non-owners said they were at least open to the possibility of buying an EV as their next car instead of a traditional gas-powered vehicle. This represents a great opportunity for Canadian car dealers with EVs in their line-up.

With virtually constant presence in the media spotlight, it’s perhaps not all that surprising that Tesla was the brand most often named by potential EV buyers in our survey as coming to mind without any prompting. In fact, Tesla is by far the most popular electric vehicle manufacturer currently in market, with a full two-thirds of car shoppers claiming it to be their most desired EV brand. Lagging far behind in second place is Toyota, with 8% of respondents identifying it as their most desired EV brand. After Tesla’s virtually untouchable 77% rate of unaided brand awareness, Toyota came in at a solid 32%, followed by Chevrolet, Ford and Nissan, at 18%, 17% and 15% respectively.

Of course, despite the generally positive attitude Canadians have towards EVs, there is still plenty of room for sales growth for traditional automotive brands in the segment and opportunities for dealers to encourage and motivate buyers to take the EV plunge.

One of the key areas to consider is just why some consumers are not interested in buying an EV, at all.

According to our survey, the top three objections buyers have about EVs are a higher purchase price and limited travel range, both coming in at 61%, as well as a lack of charging stations or power availability (54%). Other objections include concerns about maintenance cost, lack of suitability for cold weather, and – perhaps counter-intuitively – detrimental environmental impact because of battery manufacturing and disposal requirements.

Among potential EV buyers, fuel cost efficiency is the top reason they would consider such a purchase (83%), followed by perceiving EVs to be environmentally friendly (70%), and requiring less maintenance than pure internal-combustion vehicles (51%).

Interestingly, while 79% of potential buyers say government incentives could motivate them to purchase an EV, a full 30% of survey respondents said the minimum financial incentive that would sway them to sign a purchase agreement is more than $10,000. Another 28% of respondents said it would take at least $6,000 to convince them to buy an EV – still higher than the federal government’s current $5,000 maximum incentive.

So, what does this all mean for dealers eager to take advantage of high consumer interest in EVs and aiming to gain a competitive advantage in the marketplace?

Clearly, dealers need to develop marketing strategies to leverage the perceived positive attributes EVs have among consumers. However, it’s just as important to address barriers and consumer objections in the marketing messaging.

Seeking to identify the key factors that can motivate an EV purchase among prospective consumers, our survey found that potential buyers overwhelmingly want to know ahead of any purchase just how they are going to be able to charge their EV at home and on the road, and exactly how far they can travel in between charges.

Another key factor that may be hindering EV sales across the board is a general level of confusion and lack of awareness among consumers about the differences between battery-powered electric vehicles (BEV), hybrid electric vehicles (HEV), and plug-in hybrid electric vehicles (PHEV), with only 37% of car shoppers indicating they are clear on the distinctions.

Thus, dealers looking to develop promotions and marketing collateral to increase sales of EVs should think about how they can creatively integrate elements that educate consumers about the different types of EVs available in the marketplace and help dispel many of the myths and misconceptions that still surround EVs, particularly with regard to vehicle performance and maintenance costs.

According to our survey, online video, third-party review websites, and manufacturer websites are the top information sources potential buyers use to learn more about EVs, with dealerships down the list and tied with friends and family as the preferred EV information source for 27% of respondents.

Clearly, then, there is plenty of opportunity for dealerships to do more to educate, inform and motivate buyers to put a charge into their EV sales!

One of the most surefire methods to attract and connect with your customers is to have a solid understanding of your target audience. That’s why, at TRADER, we are committed to consistently staying on top of consumer trends and relaying our research findings to our dealer partners.

In February 2021, we partnered with the Angus Reid Group to survey over 1,000 Canadian car buyers, who either purchased a vehicle in the past two years, or, intend to purchase a vehicle in the next two years. At the foundation of the study, we wanted to gain a better understanding of the perceptions and priorities of consumers throughout the car buying process. Let’s take a deep dive into what we’ve learned from Canadian car shoppers and buyers alike.

When rating the importance of purchases, over half of our survey respondents consider a vehicle to be an important life purchase, second only to a home. Taking a deeper dive into their vehicle purchase mindset, shoppers were asked to share their feelings with regard to the process. Of those surveyed, 81% said they feel anxious when purchasing a vehicle. The primary source of this response is grounded in the belief that they may be spending too much, (63% of respondents). Similarly, 49% of consumers expressed feeling uneasy about negotiating a better deal, as negotiations are not their strongest suit. With that said, consumers believe that negotiations are an essential part of the purchase process, as three-in-four buyers did engage in at least some level of haggling specific to the purchase price of their vehicle.

Digging deeper into the negotiation aspect, 63% of consumers report that the primary reason for not negotiating is grounded in the belief that the asking price was fair. When we look at the reasons why consumers do negotiate on price, 48% state they always negotiate, 33% wanted to pay less, even if the asking price was fair, and, 33% wanted to get a great deal.

So how can you help your customers build comfort and confidence in the car buying journey? A large percentage of car buyers say that there are certain factors that would increase their faith when discussing the price of a car. At the top of the list, 81% of consumers claim that access to a price comparison tool that shows fair market value would instill confidence in the price of a vehicle.

Car shoppers use a variety of online sources to compare prices. These remain consistent with what we’ve observed through other recent consumer research, with 77% using online automotive marketplaces, 69% visiting manufacturer websites, and 66% browsing dealership websites to help build confidence when discussing price.

Taking a look at the rankings of the top three most important factors when purchasing a vehicle, as reported by consumers, 77% rate price as most important, followed by fuel economy at 49%, safety at 45%, and 40% rate the brand as important. Pivoting to ranking the top three factors that encouraged these same consumers to purchase a vehicle, price remains the most influential. Of those surveyed, 69% claim that feeling like they got a good deal was the most encouraging factor, while 61% state that getting a good price break for trading in their current vehicle motivated them to buy, and 57% were encouraged by lower interest rates.

Consumers are willing to put in the work to get a good deal. Ninety-two per cent of respondents either do a lot or a moderate amount of comparison shopping to find a bargain. More specifically, 63% of younger car buyers (18 – 34) are willing to do a lot of shopping around – even more likely than older buyers 55+ (51%) – as this often represents their first large purchase.

The majority of car buyers are satisfied with their vehicle purchase price. Specifically, 84% said they were pleased with the price they paid for their last vehicle. If you’re wondering what it would take for a consumer to pay more for a vehicle, the top factors, as reported by consumers, are fuel economy, getting the brand they want, a good assortment of features and amenities, and low insurance rates.

With regard to the pandemic, most consumers report that COVID-19 has not changed how much they would spend on a car. Only 27% of respondents claim they would need to decrease spending, resulting from a reduction in income earning, albeit maintaining the necessity to drive.

Distilling these latest consumer research findings, we have three key takeaways for our dealer partners. We recommend delivering the utmost value to the car buying experience with very thorough online listings, honest and upfront pricing, and, access to price comparison tools. These three aspects play a crucial role in providing for a more transparent and less stressful negotiation process, avoiding any back and forth between your sales personnel and the end consumer, and often result in working sales opportunities that are far more ready to close!

At the onset of the pandemic there was much uncertainty surrounding just about every aspect of automotive. As we embarked on a journey to gain a better understanding of consumer perceptions surrounding car shopping during COVID-19, we too were uncertain what the results of our research would uncover. Following numerous waves of consumer research, one thing became apparent – vehicle purchase intentions remain strong and stable amongst Canadian new and used vehicle intenders.

When comparing results from our previous study, conducted in January of this year , to our most recent run in March, consumer intention to purchase a vehicle within the next six months remained steady, at 17%.  We’ve also witnessed a trend in the right direction with regards to timing to purchase a car amongst consumers who intend to buy a vehicle within the next 6 months. At the very start of the pandemic, we reported that 72% of shoppers within this cohort believed it would take them longer than usual to make a vehicle purchase, whereas we can now report a significant decline with this cohort, with only 38% expecting to extend the timing of their purchase.

Triggers to purchase have remained more or less consistent with previous research waves. The largest group of respondents, 27% specifically, state that their current car is getting too old, while 18% desire to upgrade to something newer and 9% require a larger vehicle. The most common information sources used by pre-owned car shoppers remain unchanged, however, a slight uptick in automotive marketplace and dealership website usage was noted. Our study found that 62% of consumers use automotive marketplaces, 39% access dealership websites and 33% use manufacturer websites throughout the car buying journey.

Considerations of COVID-19 as worsening generally decreased. Of those surveyed, 41% said they were very concerned about COVID, which has shown a double-digit decrease when compared to the 66% metric recorded at the start of the pandemic. We have also witnessed further easing specific to consumer concerns about personal finances. At the beginning of COVID, 75% of respondents were nervous about the effects of the pandemic on their personal finances, while our most recent research shows that number has decreased to 49%. Similarly, at the start of the pandemic, 68% of respondents reported that they intended to delay their vehicle purchase, whereas today, that group has nearly halved, to a mere 36%. Finally, respondents who were nervous about their ability to afford a vehicle because of COVID has decreased from 56%, recorded in March 2020, to 37% in March 2021.

Based on the findings from our latest wave of consumer research, it’s fair to say that the general levels of uncertainty and apprehension that car shoppers reported just a year ago continue to trend in a positive direction. We’re optimistic that the results from our latest consumer research combined with the double-digit growth in key traffic and engagement dimensions right across the country on gotrader.ca will translate into yet another surge of new and used car shopper demand for our dealer partners going into what should be another hot selling season.

Dealers have experienced 36 per cent growth in leads from the marketplace and 80 per cent growth in website sales conversions

TORONTO, ON – November 26, 2020 – TRADER Corporation, Canada’s leading digital automotive solutions provider, is analyzing and reporting on valuable performance data collected from over 255 dealers currently benefiting from Digital Retailing on gotrader.ca, and sharing those findings with the Canadian dealer community.

gotrader.ca is one of the first marketplaces globally, and the first in Canada, to offer digital retailing functionality, which is powered by the Motoinsight MotoCommerce platform. The integration allows consumers to seamlessly build and complete transactions directly from gotrader.ca marketplace listings and dealer websites. Six months of performance data shows dealers using the MotoCommerce functionality on their dealership websites experienced an 80 per cent growth in lead-to-sale conversion.

Dealers utilizing the MotoCommerce software on their dealership website also have the ability to deploy the same functionality to their gotrader.ca marketplace listings, allowing them to provide nearly 10 million monthly marketplace shoppers with the ability to configure and complete transactions from a vehicle details page (VDP). Dealers with the ‘Buy Online’ feature activated on their VDPs have seen 12 per cent more views and 36 per cent more total leads than advertisers without the feature.

The incredible consumer response underscores growing demand among Canadians in conducting more of the car buying process digitally. A survey of gotrader.ca marketplace users, from April 2020, revealed 41 per cent are interested in purchasing a vehicle online, while 61 per cent would be interested in purchasing vehicle accessories online. Appetite for digital retail has also grown amid the pandemic more recently with 2 in 3 respondents expressing a desire to purchase a vehicle online since the start of COVID-19.

“Dealers using digital retailing have witnessed a significant increase in qualified traffic, enabling greater operational efficiencies through omni channel execution, and improvements to overall profitability and customer satisfaction,” says Matt Lawson, Vice-President, Dealer Software & OEM, TRADER Corporation. “We want to empower every dealer in Canada to reach the most qualified in-market shoppers and provide consumers with access to buy cars easily with a click of a button.”

TRADER Corporation was the first to launch a digital retailing solution on an automotive marketplace to dealers in May 2020. The gotrader.ca digital retail integration features include:

• A “‘Build My Deal’ button allowing customers to enter the MotoCommerce platform directly from the dealer’s vehicle details page to configure pricing, review accessories and protection plans, complete trade-in appraisals, apply for financing, and lastly deposit and finalize agreements.
• A ‘Buy Online’ badge on search results page listings, to drive awareness with buyers that the dealership offers an online vehicle purchasing option.
• A ‘Buy Online’ identifying badge and a ‘Buy This Vehicle’ widget on vehicle details pages adds an additional layer of awareness for each retailer’s digital offering.

To learn more about activating Digital Retailing on gotrader.ca visit go.trader.ca/DigitalRetail

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About TRADER Corporation:
TRADER Corporation is the leading digital marketing partner for Canadian automotive retailers and manufacturers. With over 25 million visits a month and more than 6 million mobile app downloads, TRADER’s largest automotive marketplaces – gotrader.ca and AutoHebdo.net – are the #1 source for all things automotive in Canada. The company offers retailers and manufacturers access to a robust audience of new and used car shoppers, best-in-class digital advertising, website and software solutions, and rich data insights. TRADER Corporation is the first to offer a completely integrated digital retail experience for consumers and dealers on a major Canadian automotive marketplace. For more information, visit go.trader.ca. Follow TRADER on LinkedIn, Facebook and YouTube.

 

About Motoinsight

Motoinsight partners with automakers and dealerships to redefine automotive retail. Motoinsight’s flagship digital retailing platform MotoCommerce enables revolutionary omni-channel and e-commerce enabled car-buying experiences. As well, Motoinsight specializes in delivering tierless consumer experiences that connect Tier I, Tier II, and Tier III channels into a single, seamless journey. Motoinsight also operates a portfolio of owned and partnered automotive research and shopping websites, which includes experiences for brands like Consumer Reports, Globe Drive, Black Book, Unhaggle and others. Motoinsight solutions are used by nearly every automaker brand, over 1,400 dealership franchises and the largest lenders and insurance companies. The company serves customers in the United States, Canada and Australia. For more information, visit www.motoinsight.com.

 

For media requests please contact:

Gage Knox

gage.knox@wearecoop.ca