BRITISH CAR BUYERS TURN THEIR BACK ON HAGGLING, CAN THIS BE TRUE?
This comes as a bit of a surprise to me if I am honest, what with todays consumers ability to access information via various mediums but apparantly Autotrader have a team charged with obtaining all these facts and more about our buying habbits.
56% of recent car buyers paid the asking price or more (including add-ons)
71% of younger car buyers are put off from price negotiation as it makes them feel uncomfortable
Online research now used to find most competitive deals as car dealers price more transparently
Often considered the traditional way to get a good deal on your next car, the art of haggling has been closely associated with the car buying experience for decades. But according to Auto Trader’s new Market Report, the art of haggling seems to be on the decline, with 56% of car buyers who bought a car in the last six months claiming to have paid the asking price or more (including add-ons) – which is 12% more people than last year.
Now released twice a year, around the new registration dates – Auto Trader’s Market Report suggests that for many, haggling on price is an unpleasurable process. Over a third of UK car buyers surveyed (34%) identified haggling as a more uncomfortable experience than asking for a pay rise at work, complaining about food in a restaurant or even asking for a free upgrade on a flight.
51% of female car buyers agreed that more often than not, they would not negotiate when it comes to price as it makes them feel uncomfortable, in fact – over a quarter of women claimed they would rather go to the dentist than buy or sell a car – with more woman even claiming to be more confident in buying a house than purchasing a new vehicle.
Nearly three quarters (71%) of young car buyers within the Millennial age group also claim to be put off from price negotiation for the same reason – with haggling identified as a process they simply aren’t comfortable doing.
But it appears to be an experience that more car buyers are avoiding, as more detailed online research is replacing physical negotiations on price, which is signaling the end of haggling all together.
The reason why the majority of consumers aren’t haggling could be explained by a different approach to car buying shown by the Millennials. 67% of recent car buyers aged 17- 24 claim to have paid the asking price or more, and it’s a percentage that declines with a car buyer’s age.
Nathan Coe, Auto Trader Operators Director, said, “Consumers are now approaching car buying in the same way they do with most other large purchases. Online search has evolved to the point where consumers can compare cars of the same age, similar mileage and engine size – amongst a huge variety of
other variables that could affect price – and when these searches are more comprehensive: prices become more transparent.”
“As consumers and car dealers have the same expectations on price, the need for awkward haggling that has become intrinsic to the car buying process is eliminated – as both parties have easier access to clear information on car price comparison.”
Auto Trader’s Market Report reveals that almost a quarter (24%) of Millennials claim to have used a mobile to price check cars they see on a forecourt with similar online models, with 66% of all UK car buyers claiming they would consider doing so in the future.
80% of car buyers using a mobile device on a forecourt use it for checking prices – which is alleviating anxieties about not getting a fair deal or simply paying too much for a car.
In response to this change in car buying behaviour, car dealers are becoming more competitive with pricing, acknowledging that prices are now more transparent and easily comparable – not only within their geographical area – but against the entire online UK car market.
CarShop, one of the UK’s largest car supermarkets, has developed a team of Pricing Analysts to monitor the market daily, and make adjustments accordingly – but it has also encouraged consumers to do online research in its stores.
Leo Nelson, Marketing Director of CarShop, said: “The key success of this strategy has come in the form of communication and transparency; and as a result, we have seen a reduction in the number of people expecting to be able to haggle over price, or ask for a discount.”
“We are aware that customers have access to information, and are not afraid to use it. But because we believe in our product and pricing, we have implemented customer WiFi in our stores to help customers reaffirm that haggling is not necessary, and alleviate any concerns.”
For most consumers however, the perception of uncomfortable experiences with car buying is far worse than the reality. 33% of consumers claimed that their perception of negotiating on price with a car dealer would be unpleasant – yet just 17% claimed to have experienced an uncomfortable haggling experience in the past.
These negative perceptions could be lifted in light of the new changes the industry is currently going through, as car buyers become more informed and digital platforms offer more transparency and clearer information for a new generation of car buyers.
Whether haggling still has a role for some car buyers in the future remains uncertain, but it would seem that for the Millennials who rely on online information more than any other source, the continued growth of this trend could eliminate the need for face-to-face car price negotiation forever.