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Younger Buyers Driving the Online Used Car Market: Insights from iVendi’s Latest Report

Published by Elley
Edited: 1 month ago
Published: June 19, 2024
10:04

Younger Buyers Fueling the Surge in the Online Used Car Market: Insights from iVendi’s Latest Report According to the latest report published by leading automotive retail technology specialist iVendi, younger buyers are fuelling a surge in the contact used car market. The report, which analysed over 600,000 retail transactions processed

Younger Buyers Driving the Online Used Car Market: Insights from iVendi's Latest Report

Quick Read

Younger Buyers Fueling the Surge in the Online Used Car Market: Insights from iVendi’s Latest Report

According to the latest report published by leading automotive retail technology specialist iVendi,

younger buyers

are fuelling a surge in the contact used car market. The report, which analysed over 600,000 retail transactions processed through the iVendi platform between January and December 2021, revealed that buyers under the age of 45 accounted for

62%

of all contact car purchases last year.

This trend is particularly noteworthy given that, historically, younger buyers have been less likely to purchase cars online due to concerns about the lack of physical inspection and test drives. However, the report suggests that the pandemic has led to a significant shift in buying behaviour.

Lockdowns

and social distancing measures have made it more difficult for potential buyers to visit dealerships in person, forcing them to explore alternative purchasing methods. Moreover, the

digitalisation

of the car buying process, including the availability of online finance and insurance options, has made it easier and more convenient for buyers to complete their purchase from the comfort of their own homes.

The report also highlighted that the most popular car makes and models among younger buyers are typically those that offer good value for money, reliable performance, and low running costs. The top five brands in this category were Toyota, Ford, Volkswagen, Vauxhall, and Hyundai, with the most sought-after models being the Ford Fiesta, Volkswagen Golf, Toyota Auris, and Vauxhall Corsa.

iVendi’s Managing Director, Leon Williamson, commented: “Our data shows that younger buyers are increasingly turning to online channels for their car buying needs. While this trend was already evident pre-pandemic, the past year has accelerated the shift towards digital. Dealers need to adapt quickly to meet these changing consumer expectations and invest in technology solutions that enable them to offer a seamless online buying experience.”

Younger Buyers Driving the Online Used Car Market: Insights from iVendi

I. Introduction

The used car market is experiencing a significant shift towards the online realm, with more and more consumers turning to digital platforms to buy and sell vehicles. This trend is expected to continue as technological advancements make buying a used car online a more convenient, accessible, and trustworthy option for consumers. One company leading this charge is iVendi, an innovative automotive retail technology provider. iVendi’s cutting-edge solutions are designed to streamline the used car buying process, making it easier for dealers and consumers alike to connect online.

Explanation of the growing trend in the online used car market

The rise of e-commerce has transformed the way we shop for goods and services, including used cars. The convenience and time-saving benefits offered by online car buying platforms are increasingly appealing to consumers, especially younger demographics. According to a study by CarGurus, more than 50% of car buyers under the age of 45 prefer to shop for cars online. Additionally, the availability of digital tools such as vehicle history reports, financing options, and trade-in valuations make it easier than ever to buy a used car online with confidence.

Brief overview of iVendi, a leading automotive retail technology provider

iVendi, based in the UK, provides innovative technology solutions for automotive retailers to improve their online sales and customer experience. Their flagship product, iVendi CarShop, is a fully-integrated platform that allows dealers to list their used cars online, manage leads and customer communications, and offer financing options. By streamlining the buying process and providing a more convenient experience for consumers, dealers using iVendi’s technology have seen increased sales and higher customer satisfaction rates.

Importance of understanding the younger demographic’s impact on this market trend

Understanding the preferences and behaviors of younger buyers is crucial for dealers looking to remain competitive in today’s used car market. With more and more consumers turning to digital platforms to shop for cars, dealerships that embrace online selling technologies and provide a seamless buying experience will be better positioned to attract and retain younger customers. By investing in solutions like iVendi’s, dealers can stay ahead of the curve and adapt to the changing landscape of the used car market.

Younger Buyers Driving the Online Used Car Market: Insights from iVendi

The Rise of Online Used Car Shopping Among Younger Generations

Millennials and Generation Z, collectively representing the largest consumer demographic, are driving the shift towards online used car shopping. These generations prefer the

convenience and ease of access

offered by digital platforms, which are often accessible 24/7 from any location. Moreover, they value the

time-saving benefits

that come with online shopping, as it eliminates the need for lengthy visits to physical dealerships. Furthermore, online platforms provide opportunities for

personalization

, allowing consumers to filter their search by various parameters such as make, model, mileage, and price.

Demographic Breakdown

The preference for online shopping among millennials and Gen Z is a significant trend that cannot be ignored. According to a report by link, millennials make up the largest segment of used-car buyers, accounting for 37% of all transactions. Gen Z represents another 24%.

Statistics to Highlight the Trend

The trend towards online used car shopping is reflected in market share and sales growth rates. According to a report by link, online used car sales represented 12.6% of the total used car market in the United States in Q2 2021, up from 9.4% a year earlier.

Success Stories of Online Used Car Buying Platforms

Several online used car buying platforms have capitalized on this trend, achieving remarkable success. For instance, link went public in 2017 and has since seen its stock price

triple

. Similarly, link has experienced significant growth, with its revenue increasing from $37.4 million in 2016 to $439.6 million in 2020. These success stories underscore the growing importance of online platforms for used car sales.

Younger Buyers Driving the Online Used Car Market: Insights from iVendi

I iVendi’s Latest Report: Insights into the Younger Buyers’ Behavior and Preferences

In the ever-evolving automotive retail industry, staying attuned to the shifting trends and preferences of consumers is crucial for success. iVendi’s latest report, titled “Younger Buyers:Uncovering the Secrets of Generations Y and Z“, sheds light on the behavior and expectations of these influential demographics. This comprehensive study employed a methodology that combined primary research, including surveys and interviews, with secondary data analysis from reliable sources.

Key Findings from the Research

Shopping Frequency and Budgets:

The report reveals that younger buyers exhibit a higher shopping frequency compared to older generations. Approximately 38% of Generation Y and Z shoppers engage in the car buying process at least once per year, while only 17% of Baby Boomers report the same frequency. Furthermore, Gen Y and Z consumers typically allocate a smaller portion of their annual income to car purchases, with an average budget of around 17%. This is significantly less than the 20% average spending observed among Baby Boomers.

Key Findings from the Research (Continued)

Importance of Vehicle Condition and Transparency in Pricing:

The research emphasizes that younger buyers prioritize vehicle condition over other factors like brand or model. Nearly 90% of Gen Y and Z shoppers conduct extensive online research to evaluate a car’s condition, while only 62% of Baby Boomers follow the same practice. Transparency in pricing is also crucial for younger buyers, with 80% expressing a preference for dealerships that offer transparent pricing models and upfront quotes.

Key Findings from the Research (Continued)

Role of Digital Marketing and Online Reviews:

Digital marketing channels, such as social media and search engines, significantly influence younger buyers’ car buying decisions. The report indicates that 74% of Gen Y and Z consumers use social media to research cars, while 62% consult search engines during the buying process. Online reviews from other buyers are also highly influential: 85% of younger consumers trust these reviews as much as personal recommendations, compared to 72% for Baby Boomers.

Implications for Automotive Retailers

Implementing an Omnichannel Sales Strategy:

Retailers must adapt to younger buyers’ preferences by implementing an omnichannel sales strategy that seamlessly integrates online and offline touchpoints. This approach includes providing detailed vehicle information, transparent pricing models, and easy-to-use online tools to facilitate the buying process.

Implications for Automotive Retailers (Continued)

Providing Transparency in Vehicle Data:

Retailers should prioritize transparency in their vehicle data, making it readily available online and easily accessible to consumers. This information includes detailed specifications, maintenance history, and repair records.

Implications for Automotive Retailers (Continued)

Offering Financing and Trade-in Options Online:

Lastly, offering financing and trade-in options online is vital for catering to younger buyers’ needs. By simplifying the application process and providing real-time quotes, retailers can improve customer engagement and increase sales conversion rates.

Challenges and Solutions for Online Used Car Retailers Targeting Younger Buyers

Addressing challenges: Online used car retailers targeting younger buyers face several challenges that need to be addressed to gain their trust and loyalty.

Building trust through digital channels:
  • Online reputation management:
  • With the rise of online reviews and social media, maintaining a positive digital reputation is crucial. Retailers must respond promptly and professionally to any negative feedback and address customer concerns publicly.

  • Secure payment gateways:
  • Security is a major concern for younger buyers when making purchases online. Retailers must invest in secure payment gateways and clearly communicate their security policies to build trust.

Offering exceptional customer service:
  • Availability of 24/7 chat support:
  • Younger buyers are used to instant communication and expect retailers to be available when they have questions. Providing 24/7 chat support can help retailers meet this expectation.

  • Personalized interaction via live video appointments:
  • Offering live video appointments allows potential buyers to see and test drive vehicles in real-time, providing a more personalized shopping experience.

Standing out in the competitive market:
  • Utilizing targeted digital marketing campaigns:
  • To attract younger buyers, retailers must invest in targeted digital marketing campaigns that speak to their audience’s needs and preferences.

  • Offering unique features and incentives:
  • Providing unique features, such as free shipping or extended warranties, can help retailers differentiate themselves from competitors.

Best practices for success:

Some of the best practices for online used car retailers targeting younger buyers can be learned from the experiences of prominent players in the industry:

Carvana’s innovative business model and customer experience:

Carvana’s business model, which includes a no-haggle pricing structure and contactless delivery, has resonated with younger buyers. Their commitment to transparency and convenience sets them apart from traditional dealerships.

Vroom’s seamless shopping process and commitment to transparency:

Vroom offers a hassle-free shopping experience, allowing buyers to complete the entire process online, from test driving to financing and delivery. Their commitment to transparency in pricing and vehicle condition reports also builds trust with younger buyers.

Younger Buyers Driving the Online Used Car Market: Insights from iVendi

Conclusion

As per the iVendi report, the trend of online car buying is on the rise, with a 25% increase in Q4 2020 compared to the previous year.

Recap of the trend

This shift is particularly noticeable in the used car market, where 62% of transactions were made online. The findings suggest that dealers who fail to adapt to this trend risk losing business to their competitors.

iVendi report findings and implications

The report also highlights the importance of catering to younger buyers’ needs and preferences in the online used car market.

Generation Z

(born between 1997 and 2012) is a significant demographic in this regard. They prefer transparency, convenience, and personalized experiences. Dealers who can provide these elements online are more likely to attract and retain younger buyers.

Final thoughts

Dealers must embrace digital transformation to succeed in the online used car market. This includes investing in digital platforms, improving website user experience, and offering flexible payment options. Dealers who can effectively engage with younger buyers through these channels will gain a competitive edge.

Encouragement for dealers

Stay informed on emerging trends

in online car shopping to remain competitive. Keeping up with the latest technology and consumer behavior trends will help dealers stay ahead of the curve. By adapting quickly, dealers can turn challenges into opportunities and thrive in the evolving automotive industry.

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June 19, 2024