Tools

Equipping your dealership staff with appropriate lead management tools facilitates efficient and successful management of leads. These tools ensure that every lead is promptly attended to and staff interactions with prospects are meaningful and productive. Some tools to consider using at your dealership include a Customer Relationship Management (CRM) tool, such as Activix CRM and Consumer Insights as well as Enriched Lead, offered in AutoTrader’s Used Vehicle Listings – Superior. Learn more about the benefits and uses of these tools in our Lead Management Best Practices Guide.

Source: Dig Insights, Vehicle Path to Purchase, July 2022, (n=1,369).

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

Provincial Search Breakout

2022 Provincial Search Data Revealed Key Regional Preferences for Car Shoppers Across the Country.

British Columbia Edges Away from Luxury

This year the Honda Civic earned a spot in the province’s Top 10 most searched vehicles list, knocking the BMW M from the list, signifying a continued shift away from luxury vehicles for British Columbia. In 2021, the more economical Toyota RAV4 (#4) replaced the luxury BMW X5. Whereas in 2020, British Columbia had the most luxury vehicles in the country compared to any other region at six vehicles – in 2022 this was down to just four. As for top honours, the Ford F-150 held strong at #1.

SUVs Gain Popularity in Alberta

Larger vehicles continued to command attention in Alberta. Comprising half, the top searched list were four SUVs, one more than last year, and a truck. The Toyota Tacoma, 4Runner and Chevrolet Corvette were knocked off the list, and the BMW X5 (#8), Honda Civic (#9) and Toyota Highlander (#10), became new additions for Albertans.

Trucks Hold Strong in Saskatchewan

Saskatchewan stayed true to its roots, again outpacing every other province in the sheer number of trucks on its Top 10. The Ford F-150, Chevrolet Silverado 1500, GMC Sierra 1500, and Toyota Tacoma held on as category favourites. Adding to the province’s year-over-year record of having no luxury vehicles on the list, the Honda Civic (#3) made a new appearance, reinforcing Saskatchewan’s penchant for practicality.

Cars Remain King in Ontario as Province Shifts to more Economic Models

Cars continued to dominate in Ontario, taking up 80 per cent of the region’s Top 10. This year, Ontarians were seeking more economical options, with one less luxury model making the cut, and the Honda Civic rising to top spot all the way from fifth last year. In 2022, the Honda Accord (#10) also replaced searches for BMW M vehicles.

Honda Civic Takes Back Title in Quebec

2022 marked the first place return of the perennial favourite Honda Civic, reclaiming the top spot from the Porsche 911 – the surprise favourite of 2021. The Porsche 911 didn’t fall far behind (#2), creating an interesting mix of luxury and economical. The Toyota Corolla (#8) was a new addition, bumping the Jeep Cherokee from the Top 10.

SUVs Overtake Cars in Manitoba

SUVs gained traction in Manitoba this year, accounting for 60 per cent of the Top 10 list and making it the province with the highest interest in this category. The 2022 addition of the Toyota Highlander (#9) in place of the Chevrolet Corvette pushed cars as a category to a close second.

Maritimes Move Away from Upsizing

Atlantic Canada continued to place less importance on luxury in 2022. The 2021 regional rise of SUVs was short lived, with the elimination of the Toyota Highlander making room for the Corolla (#9) in this year’s Top 10. While the Ford F-150 maintains its first-place ranking, cars and sedans account for 50 per cent of the vehicles on the list, with no mention of any luxury vehicles.

2023 Trend Outlook

In addition to mining marketplace data for insights and trends, each year GoTrader conducts ongoing consumer research studies to provide an up-to-the minute view of the evolving automotive landscape. This year’s research explored how car shoppers are navigating the aftermath of the microchip shortage, amid inflation and cost-of-living increases.

High Gas Prices Boost Electric Vehicle Interest

Electric vehicles (EVs) have been climbing in popularity for years, with interest soaring to new heights in 2022. When gas prices skyrocketed in March, searches for EVs on GoTrader spiked too, increasing 89 per cent year-over-year. According to a study conducted among GoTrader users across Canada, 2-in-3 EV intenders said the rise in gas prices directly accelerated their desire to go green, in a bid to reduce fuel dependency. Throughout 2022, the number of car shoppers inquiring about EVs climbed up 148 per cent compared to the same time last year. Fuel cost efficiency remains the top factor for EV adoption, followed by environmental friendliness and low maintenance, with EV searches the highest in British Columbia and Ontario, likely in response to greater government incentives offered in these regions. With the EV market evolving to keep pace with demand, 2022 saw several new releases, including highly anticipated EV trucks, with the arrival of the GMC Hummer and Ford F-150 Lightning. 2023 is already shaping up to be another big year, with the anticipated Chevrolet Silverado EV and Sierra launch, an EV truck from Ram, and EV performance cars becoming a bigger trend throughout the next year.

Car Shoppers Adapt to Supply Issues

This year Canadians continued to face higher vehicle prices, less availability and longer wait times, as impacts of the microchip shortage persisted. New vehicles became an even hotter commodity, with the average time a new vehicle spent on GoTrader decreasing from 86 days in 2021 to 49 days in 2022 (a 43 per cent drop). Canadian vehicle intenders proved they were ready to come out on top, adapting to the new market norms, with 33 per cent willing to change the vehicle brand and model they were planning to buy (up from only 20 per cent in 2021), and 23 per cent willing to pay more due to the shortage.

Canadians Turn to Used Vehicles as Prices Start to Soften

Last year, the impacts of the global microchip shortage strained new vehicle supply, prompting more Canadians to consider buying used. This trend continued to grow in 2022, as research conducted on GoTrader revealed a third (36%) of Canadian vehicle intenders were willing to switch from purchasing new to used, a 10 per cent jump from 2021. With the average price of used vehicles softening, and inventory rising on AutoTrader, used vehicles continue to be an appealing option for car shoppers.

Purchase Intent Remains Steady

Despite economic uncertainty, AutoTrader’s research indicates a promising outlook for the automotive industry. The research showed that Canadians’ intentions to purchase a vehicle in the next six months actually increased to 24 per cent in October 2022, compared to March of this year (18%). Most vehicle intenders have a positive view of their personal and household finances, with only a few (15%) feeling that their situation may worsen over the next 6 months. The study revealed that car shoppers’ budgets likely won’t change even if the market does, regardless of if the economy stays the same or declines.

Methodology

Analysis was performed based on site analytics from GoTrader using Canadian search data from January 1 to October 25, 2022. Year-over-year analysis was based on data from January 2021 to October 25, 2022. gotrader.ca commissions independent third-party research to understand Canadian car shopping habits amongst both car intenders and past purchasers. Throughout the year, GoTrader also surveyed its users to maintain a pulse of car shopping behaviours over the course of 2022.

Sources: GoTrader Data Warehouse, January-December 2022. Auto Trader Electric Vehicle Research, April 2022 (n = 1,192). GoTrader Microchip Shortage Research, May 2022 (n = 1,266). Impact of the Economic Situation in Canada on Vehicle Purchase Intentions, DIG Insights, October 2022 (n = 456)

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.