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Polk study asks: Traditional media obsolete among first-time buyers?

November 18, 2010

Traditional mass media has been rendered nearly obsolete among first-time vehicle purchasers, according to a recent study by the Polk Center for Automotive Studies.

 

Out of a variety of media outlets, 35 percent of first-time buyers said they consider the Internet to be their most important informational tool, compared to 8.2 percent who named television, 4.4 percent who listed magazines, 3.6 percent who cited newspapers, and 1.1 percent who utilized radio. 

"First-time buyers’ dependence on Web-based media validates the need for an aggressive interactive strategy to court them on the manufacturer and retail level," said Lonnie Miller of the Polk Center. "The Internet’s relevance in the 18-to-30-year age group has reached critical mass and is completely reconfiguring how car companies need to reach out to first-time buyers."

 

Miller predicted that emerging technologies such as radio podcasts and video-on-demand would create new marketing opportunities, as increased bandwidth facilitates a convergence of cell phones, PDAs, Internet and broadcast tools. 

"Harnessing model media technology will be the automotive industry’s most important marketing challenge and opportunity in the next decade," said Miller. "Generation Y is tuning out traditional advertising and watching what they want, when they want.

 

"Creating breakthrough content and developing relationships with customers through emerging media technologies will separate the winners from the losers in the next five years." 

The study also discovered that first-time buyers are independent in their decision-making and rarely compelled to visit the dealership where their parents last purchased a vehicle.

 

Sixty-five percent of respondents said they bought a vehicle without any influence from family and friends, and just 7 percent said they felt buying from the same dealership as their parents was of high importance to them. 

Polk’s Jeff Martini added: "We were impressed that nearly two-thirds of respondents had the final say when it came to buying their first new or used vehicle. Similarly, 48 percent got the model of car or truck they set out to buy. We think this is important to help change the perception that parents always help dictate a first-time buyer’s vehicle choice."

 

The Polk Center also reported that the No. 1 reason (26 percent) first-time buyers enter the market is due to a previously driven vehicle no longer working, which was not purchased by them. Another 19 percent said it was time to buy because they reached driving age. 

Along with first-time buyers trending toward being autonomous with their purchases, study results also indicate there is a demand for an enjoyable customer service and dealer experience. Forty-two percent of those surveyed said dealer treatment is very important to where they buy.

 

"It’s humbling to see this segment call out the importance of how dealers treat them since so many first-time buyers continue to feel their first vehicle purchase is all about getting what they want for an affordable price," said Miller. "The results are a reaffirmation that buyers in this stage in their life walk into showrooms with expectations similar to more seasoned vehicle buyers." 

As for financing behavior, study officials said it continues to be an important factor for first-time buyers. In addition to customer service experience, monthly payment amounts, fuel efficiency, availability of affordable credit, cost of insurance and gas prices were mentioned by more than 25 percent of those surveyed as being very important in their purchase decision.

 

More than half of those surveyed said they took out a loan to pay for at least a portion of their purchase. In cases where the person was buying a new vehicle, 65 percent took out a loan, while 46 percent of those getting a used vehicle decided to finance in some manner. 

Among those taking out a loan, more than 57 percent did so through their dealership, while nearly 34 percent sought financing through a bank.

 

"From a loyalty building strategy, we think it will help lending institutions to be more empathetic to the financial challenges of first-time buyers," said Martini. 

A total of 366 first-time vehicle buyers (ages 18-30) participated in the study. Respondents said they were the primary driver of the one new or used vehicle they acquired since October 2003.

 

For complete study results, see www.polk.com/

 

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