What Car? Insight weekly update – week 13
More than 70% of buyers expect a better deal as a result of coronavirus
This is the latest report in a series of weekly updates for industry colleagues from Rachael Prasher, managing director of What Car? and Haymarket Automotive.
Paying a fair price will always be a key part of any major purchase for a consumer. It’s why our Target Price – mystery shopped and guaranteed for everyone – is so crucial in giving a buyer reassurance, while still ensuring there is enough margin in a deal for a positive ongoing relationship with the retailer.
Our data, however, is telling us that what is perceived as a good deal has changed significantly as a result of the coronavirus lockdown – and this has the potential to set buyers and retailers on a collision course.
This week’s consumer analysis of over 6,100 in-market consumers reveals that nearly 71% of those looking to buy new expect to haggle for a bigger discount because of the crisis.
For used buyers, that figure falls to 58%, reflecting the surge in demand post-lockdown, and that difficulties in obtaining new stock are hardening prices. However, it perhaps also underlines that new car buyers can sense greater desperation from manufacturers whose factories were shuttered for so many months.
Buyers are also clear that they expect to be in control of any deal, with 73% saying they won’t buy a new car unless they are offered a deal, with a further 18% saying they will either switch brands or change to a different model or size of car in order to secure a discount.
More than a third – 34.7% – also tell us that they are happy to delay their purchase altogether if they don’t feel they are getting a deal that is better than pre-lockdown.
With supply still restricted, and manufacturers and retailers looking to extract maximum value from sales, the conundrum is clear. More than ever, buyers are expecting to drive away with a sense of having achieved a strong deal, and dealers’ ability to convey that feeling as part of the buying journey is going to be a crucial lever in securing sales.
More than ever, cash is king
Another side effect of coronavirus is that more buyers are now considering paying with cash, according to our data.
Nearly 10% told us this week that they will buy their next car with ‘cash’, rather than through retailer promoted finance offers.
Whether that is cash-in-hand or via personal loans is unsubstantiated at this point, although it seems likely that the perceived low cost of borrowing money drives some of this thinking – despite research from Moneyfacts.co.uk showing that interest rates on personal loans have actually gone up since the start of the year.
Potentially this is also having an impact on buyers’ willingness to spend more on a car purchase; last week 17.6% of those polled were telling us that their vehicle budget has gone up since lockdown.
Continued upward audience traffic
As I detailed two weeks ago, we’ve enjoyed booming web traffic and strong magazine sales, but the outstanding headline remains that traffic to our New Car Buying platform is generating an average of 120% more enquiries year-on-year.
Much of that is undoubtedly down to significantly raised awareness of our platform, following our television advertising campaign that ran from January to March, as well as the platform improvements we have made over 12 months, and, of course, a coronavirus-related reluctance from some buyers to enter dealerships before finishing their research.
But of course much of it is also down to pent-up demand – which, by its very nature, must subside. The positive news is that our polling shows that 28.3% of respondents are looking to buy in the next four weeks, while 27.9% are looking to complete by the end of September.
While the market will stabilize in the coming weeks, it’s reassuring to see that demand remains steady for the coming months – for now.
Top 10 sales enquiries to What Car? New Car Buying platform
Enquiries ranking / Make and model
The Seat Leon joins the Skoda Octavia and VW Golf in making an enormous impression on our readers in the week that we first drove it, shooting straight – and comfortably – into our top slot. The key now will be in maintaining that interest as orders come on stream.
Also of note is that this is the first week since lockdown began that an electric car hasn’t been in our top 10, although the Kia e-Niro sits in 11th place.
The Nissan Qashqai is back in the top ten, demonstrating its enduring appeal and the weight of consumer offers available as it nears its run out prior to being replaced.
Of the cars in the top 10, only the Leon and Jazz are not SUVs.
New Car Buying: now free to use until the end of September
We have extended our free offer to franchised dealers and OEMs to use our New Car Buying platform and lead management service until the end of September – with no tie-ins for new users, meaning there is no risk.
We recognise that our business can only thrive when retail is thriving again, and that is why we are offering leads from our in-market audience for free.
Current users include Ford Retail, JCT 600, Hendy Group, Marshall Motor Group, Snows, Vertu Motors, Vindis and Waylands Automotive.
If you’re interested in taking advantage, you can contact our support team on 020 8267 4138 or email us at firstname.lastname@example.org.
Managing director, What Car? and Haymarket Automotive