Article

New Car Leads Are not Always New Car Buyers

November 2008, Auto Dealer Today - WebXclusive

by Jason Ezell - Also by this author

Back when I was selling cars, I was convinced I could outsell any objection from a buyer—color, options, new versus used, finance versus lease. My GM’s favorite quote was, “There’s a seat on this lot for every customer.” His point was clear, “I don’t care what they said they wanted; they’re driving off in what we sell them.” Well, he was correct about half of the time.

There is a perception that Internet shoppers know exactly what they want and selling them something different will probably be impossible. I hear many dealers say they’d sell more cars from the Internet if they only had the right vehicle in stock. What?! Several Internet salespeople say they sometimes won’t even respond to a lead if it’s for a vehicle they don’t have in stock. “We’re not going to get the deal anyway; we don’t have that vehicle. Why should I waste my time?”

Very similar to offline shoppers, in 2006, 58 percent of online shoppers who submitted a lead via the Internet actually bought a different vehicle than what they submitted a lead for. In fact, of all the traffic (actual visitors) you get to your dealership Web site, 42 percent have not even decided whether to buy a new or pre-owned vehicle.

Even better, 42 percent of buyers who submitted a new-car lead drove home in a pre-owned beauty. Of those new-car lead submitters, 20 percent bought a pre-owned vehicle within 30 days of submitting a lead, while over half (53 percent) bought a pre-owned vehicle within 90 days of submitting a new-car lead. So, as a new-vehicle lead gets older, the likelihood of that new-car shopper buying a previously-owned vehicle increases dramatically.

You see how all of this applies to lot ups and Internet ups? Granted, Internet ups might be more informed; they probably have trade values, invoice, etc. Since 2004, the number of people who drive onto dealers’ lots looking for pre-owned cars has dropped from 62 percent to 56 percent. Do you think it’s simply chance that the number of people going on the Internet to find that same vehicle has increased by almost exactly the same amount?

So even with Internet ups, we should default back to what we do best: 1) keep in mind what vehicle they say they want, 2) get to know the customer and his/her needs and 3) show vehicles that you know fulfill those needs, new and pre-owned. And the next time a salesperson comes to you and says, “We don’t have the vehicle they are looking for,” keep your cool and say, “There’s a seat on this lot for every customer!” Then, hand them this article and tell them to call me.

*Statistics Sourced from JD Power 2006 Automotive Internet Shopper Study.

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