40% of Car Buyers Shop on the Web, Says J.D. Power

From Associated Press

More buyers are cruising the information highway in search of a car, according to a study released Monday.

Forty percent of consumers who recently bought a car or truck used the Internet to help them shop, up from 25% a year ago, according to initial results of a J.D. Power & Associates survey.

The survey showed that the number of purchasers who used an online buying service doubled in this year's first quarter, from 12,500 a month nationwide to more than 25,000, said Chris Denove, consulting operations director for the Agoura Hills research firm. The proportion of new-vehicle purchasers using the Internet increased from 1.1% a year ago to 2.6%.

"We continue to be amazed by the growth of automotive-related Internet usage," Denove said. "The real key is that people are using the Internet to go deeper into the shopping process than ever before."

Denove said he expects to see continued growth in online car-buying because it reduces haggling and makes purchasing easier. "The car buyer who goes online for their purchase is an extremely aggressive shopper," he said.

Another research firm, San Diego-based Strategic Vision, released similar figures Monday. It found that 35% of new-vehicle buyers used the Internet to search for information, up from 26% a year earlier. The figures were based on a survey of 33,760 buyers last fall.

A separate J.D. Power survey found Internet use by used-vehicle buyers also was significant. Among those who bought a used 1994-to-1999 model in January, 26% used the Internet to help find a vehicle and make a decision. This was the first year J.D. Power surveyed Internet usage by used-vehicle buyers, but Denove estimated that it was up from 14% the year before.

Newspapers and other traditional classified advertising media face a threat as more used-car buyers turn to the Internet to purchase their vehicles, he said.

"The implication is clear for newspapers," Denove said. "You'd better find a way to partner with online companies, otherwise you'll face considerable shrinkage of your customer base."

That already is happening with such sites as Cars.com, which has built an online database of vehicle classified ads from many newspapers. It's sponsored by several large newspaper chains.

J.D. Power's new-vehicle survey was based on telephone interviews last spring with about 2,500 consumers who bought a new vehicle in January or February. The survey of used-vehicle shoppers involved nearly 10,000 mail-in responses from consumers who bought a used car or truck in the same period.

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