Four Out of Five Car Buyers Believe Online Quotes Result in Lower Price

The Internet has had a huge impact on the way people buy cars today. Both in terms of the information available to the buyer and the ability to get competitive price quotes, the online revolution has been felt in all areas of the car market.

The latest studies show that more than 70 percent of people planning to buy a car use the Internet for research. A recent survey by Massachusetts-based Burst Media showed that 71.9 percent of prospective car buyers use the Internet to research models they will buy.

But while previous studies have demonstrated a growing use of the Internet for information gathering by car buyers, a new, exclusive BuyingAdvice.com survey looks at what buyers believe is the impact of the Internet on the price they pay.

The promise of the Internet price quote is that it will result in a lower purchase price by making dealers compete for the business of impending car buyers.

Using a sample of 1,261 of our readers who volunteered to participate, we examined attitudes toward the impact of getting an online price quote on the purchase price paid for a new car.

An overwhelming 86 percent of our sample stated that they felt that purchasers who requested online price quotes got a better deal than those that did not. Our results are supported by the leading academic work in the field, a paper published in June of 2006 in the Journal of Marketing Research by professors from University of California, Berkeley, Yale School of Management and University of California, Riverside. That study found that buyers who used Internet car buying services for new car purchases paid a lower price than those that did not.

It is clear from our survey that this message is getting out into the marketplace and the dealerships are having to adapt to facing a better informed customer who now has the tools to force them into price competition in a way that has previously not been available to them.

But consumers believe the impact of price quotes is being felt beyond the issue of price, according to our survey. Our respondents reported that they believe that requesting a price quote reduces the time it takes to make a purchase.

Eighty-two percent of our sample said that they felt that the ability to receive online price quotes speeded up the car buying process.

Traditionally the longest part of the dealership process was the negotiations. Consumers now feel that by arriving armed with a price quote they can cut the time invested in haggling. The Journal of Marketing report concluded that the greatest savings were, in fact, made by those who viewed themselves as poor negotiators or who disliked the negotiating process.

The anecdotal evidence is that dealerships who had previously been reluctant to discuss price with customers who were not physically present in the showroom will now quote a price to lure the buyer to their location rather than that of a competitor. While legislative barriers still remain to protect the dealer franchise system, the Internet has acted to force dealers within a certain geographic area to compete as never before.

At the same time, we found there was a growing number of buyers requesting price quotes. Two-thirds of our sample reported that this was the first time they had requested an online quote.

The positive feelings toward requesting a price quote via the web were also clearly demonstrated by the results when asked if respondents felt they would recommend advising a friend or family member to request a quote. Eighty-eight percent of our sample said they would tell them to do so.

So with a growing acceptance of the web price quote among consumers and dealers, we are seeing the impact of the price quote reach the purchase price, being paid for cars.

Buyers clearly believe that online price quotes help them get a better deal and are taking advantage of the edge the web gives them in increasing numbers.