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ORLANDO, Fla. – How do consumers decide what vehicles to buy or how to finance their purchase? What influences their decision, and how long does it take them to pare down their choices? Attendees at the National Automobile Dealers Association Conference at the Orange County Convention Center in Orlando Feb. 11-14 got insight into the process from Nick Plakoris who shared with them the results of the 2006 Automotive Purchase Process study based on 10 years of research and over 130,000 responses. Plakoris is group development director, corporate marketing information for Time Inc. Well-known in the automotive industry for his market studies on leasing, used cars, and the automotive purchase process, Plakoris offered that the study findings show that what he referred to as “the intender funnel” – the time during which consumers develop a defined shopping list of features that are important to them in their new vehicle, gather information, and make their purchase – is on average six months. “During the purchase process, consumers are in an active learning mode and are receptive to information about products and brands,” he told his audience. “They move from awareness to information gathering, which leads to the eventual purchase or lease. As consumers get closer to acquisition, the intensity of the process increases.” Prior to six months, consumers may begin thinking about buying a new vehicle, but the research shows they don’t take any real action towards making a purchase until they’re six months out. Moreover, the largest decline in intender volume takes place between six to five months, and three to two months from the vehicle acquisition. In fact, says Plakoris, by the time purchase intenders get close to the end of the purchase funnel, almost half have changed their mind about buying a new vehicle. This happens for various reasons the main ones being: 26.9% said their existing vehicle has at least a year of driving life remaining; 8.2% indicated the monthly payment on a new vehicle would be too high; and 6.1% said the dealer sticker price was too high. Other assorted reasons consumers give for changing their minds about buying a new vehicle are: purchased a used vehicle; job requirements changed; and household requirements changed. “This is a very fluid group of consumers,” said Plakoris. So what about the purchase intenders who follow through on their intentions to buy a new vehicle? Plakoris said they go through the cycle – once they become aware of their needs, they identify the brands that satisfy those needs and use those to build their shopping list. From there the consumer researches the brands and begins to cross some off their list until they’re left with one or two brands. Then they make their purchase decision. As the purchase intender moves down the purchase funnel, their priorities change. In the early stages they assess their needs such as storage or seating capacity and performance, and then evaluate the models available that meet those needs. From there they focus on vehicle features. Two weeks from when they make their purchase decision, price is the most important feature. According to the research, at the start of the six month-shopping cycle, the typical consumer considers 6.5 models of vehicles. By the time they’re in the final two weeks, the list declines to 1.7 vehicles. “Since buying a new vehicle is a high risk purchase, the consumer wants to make sure they’re making the right choice. Before they make their final decision, they even go back to their information sources to affirm they’re making the right one,” he said. Surprisingly, most purchase intenders don’t begin visiting dealerships or dealer and other auto-buying Internet sites until they get closer to making their final decision. The study showed 22.7% said they visit a dealer when they are one month away from the acquisition, and 98.8% indicated they visit the dealership when they are three days away. So by the time they visit the dealership, their mind is pretty much made up on what they want to buy. While dealer service influences the consumer’s shopping list consideration during the initial and middle stages of the purchase process funnel, dealer visits and price point promotion influence the final selection, said Plakoris. Quality and brand image, though, are important at all stages of the purchase process. [email protected]

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