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© 2011 R. L. Polk & Co. All rights reserved. R. L. Polk & Co. makes no representations or warranties with respect to the contents hereof and specifi -cally disclaims all implied warranties of merchantability or fi tness for a particular purpose. R. L. Polk & Co. reserves the right to make changes to this report without notice or obligation. Polk is a registered trademark of R. L. Polk & Co.

FEBRUARY 2011

1

The Internet has become an increasingly important component of the vehicle purchase process. Consum-ers shopping for new and used vehicles can fi nd a wealth of informati on and tools on auto manufacturer, dealer and third-party websites.

How much ti me do consumers spend online during the vehicle purchase process? How does the Internet compare to other channels in terms of infl uencing purchase? Why do shoppers use the Internet?

To answer these and related questi ons, Polk and AutoTrader.com recently teamed up to conduct a study of recent car buyers: 4,005 U.S. consumers who had purchased a new or used vehicle from a dealer-ship within the prior six months. The fi ndings provide insights into the role, usage and perceived helpfulness of the Internet in the vehicle purchase process.

Internet is Most Used and Infl uenti al Media For all vehicle buyers, the Internet is undoubtedly the most heavily used and the most infl uenti al channel. Today, seventy-one percent of consumers use the Internet while shopping for new and used vehicles, more than double the usage of any other informati on source. More importantly, the majority of buyers said the Internet was the most infl uenti al source leading to their purchase decision. (See Figure 1).

In additi on to being the most infl uenti al, the Internet is also seen as the most helpful informati on source. Two-thirds of consumers rated the Internet as “extremely helpful” (score of “9” or “10” on a 10-point scale).In comparison, only about one-half of used and newvehicle shoppers rated a referral from a friend or family as extremely helpful and other sources (e.g., TV, radio, direct mail) scored much lower.

This study also revealed an interesti ng fi nding regard-ing the infl uence of social media sites: 97 percent of buyers who used the Internet to shop indicated that social media did not infl uence their vehicle purchase.

More Time Spent on Third-Party Sites than on OEM, Dealer SitesFor the fi rst ti me, this research quanti fi es the length of the vehicle shopping process for consumers who use the web as part of the process. Used car buyers spend about 18 total hours, while new car buyers spend roughly 19 hours shopping for a new car or truck. For both groups, roughly 60 percent of that ti me is online, with the remainder spent visiti ng dealerships and engaging in other offl ine acti viti es.

Of the ti me online, consumers shopping for both new and used vehicles spend more ti me on third-party sites than on dealer or manufacturer sites: 7 hours for used vehicle buyers and 3.5 hours for new vehicle buyers. Both types of shoppers also visit dealer and automo-ti ve manufacturer websites; however, new vehicle buyers distribute their ti me more evenly across third- party, OEM and dealer websites.

Given that 60 percent of the ti me spent shopping for a car takes place on the web, it is criti cal for websites to provide consumers with relevant content, informati on and tools to support their decision-making process. This is parti cularly important given the multi tude of resources that the Internet makes available.

Search engines are also commonly used during the vehicle shopping process, with Google being by far the most prevalent. New and used vehicle buyers primarily use search to access a dealer website, to fi nd a dealer’s address or phone number or to access an automoti ve manufacturer’s site. About half of buyers who visited a dealer site arrived at the site via search. This indicates that shoppers use search engines as a convenient way of looking up a dealer aft er that dealer has become a part of their considerati on set.

conti nued

The Role of the Internet in the New and UsedVehicle Purchase Process

BRUCE GIFFINCorporate Market Research Managerbruce_giffi n@polk.com

JOE RICHARDSSr. Manager of ResearchJoseph.Richards@autotrader.com

Figure 1: Most Infl uenti al Sources Leading to Vehicle Purchase

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Half of new vehicle buyers and 58 percent of used vehicle buyers said that the web was the most infl uential information source in their purchase decision.

*TV, radio, direct mail, magazine, outdoor ads, and write-in answers

NOTE: Based on the 71 percent of new and used car shoppers who used the Internet to shop for their vehicle.

Q: Which media, if any, led you to the dealer you purchased from?

www.polk.comPolk View

© 2011 R. L. Polk & Co. All rights reserved. R. L. Polk & Co. makes no representations or warranties with respect to the contents hereof and specifi -cally disclaims all implied warranties of merchantability or fi tness for a particular purpose. R. L. Polk & Co. reserves the right to make changes to this report without notice or obligation. Polk is a registered trademark of R. L. Polk & Co.

FEBRUARY 2011

2

Despite Heavy Internet Usage,Initi al Contact with Dealer Occurs Offl ineAccording to the research, 67 percent of used vehicle buyers and 69 percent of new vehicle purchasers establish initi al contact with the dealer by walking into the dealership. Given that the majority of buyers do not email or call the dealer in advance of their initi al visit, it’s important for dealers to look beyond the number of phone calls and emails they receive toassess the true value of their adverti sing.

The Internet Delivers Pricing Informati on and Ability to CompareTo invest wisely in their online presence, it’s impor-tant that dealers, manufacturers and third-party sites understand how and why consumers use the Internet during the vehicle shopping process. About 45 percent of new and used vehicle buyers use the Internet to research vehicle pricing and to compare models across diff erent makes. The ability to obtain informati on on special off ers, dealer rebates and incenti ves was more important to new vehicle buyers (42 percent) than to used vehicle buyers (28 percent). (See Figure 2)

Implicati ons of the Automoti ve BuyingInfl uence StudyThe Polk/AutoTrader.com Automoti ve Buying Infl uence Study has a number of implicati ons for dealers and auto manufacturers:

• Develop Internet strategies that deliver upon shop-per needs: We all recognize the infl uence of the Internet during the shopping process. The implica-ti ons to dealers and automoti ve manufacturers are clear: leverage the Internet to infl uence a shopper’s considerati on set and create visibility for your brand. Give shoppers what they want (detailed vehicle informati on, accurate pricing, relevant content, abil-ity to compare vehicles) and promote your inventory and brand throughout the enti re shopping process.

• Make sure your SEO and marketi ng strategies are solid: Most shoppers use search to locate dealer and OEM sites. In many cases, they also use search as a Yellow Page-like service to locate the dealer phone number and/or address. It is therefore criti cal that dealers and OEMs eff ecti vely employ Search Engine Opti mizati on strategies to drive customers to their sites. To make it easier for shoppers to fi nd them, dealerships should also eff ecti vely market themselves on third-party websites.

• Determine what drives walk-in traffi c: Seven out of 10 shoppers don’t establish contact with the dealership prior to visiti ng it, indicati ng that dealers need to look beyond the number of phone calls and emails they receive and establish methods to assess which adverti sing sources were most infl uenti al in driving buyers into their dealerships.

ABOUT POLK

Polk is the premier provider of automotive information and marketing solutions. Polk collects and interprets global data, and provides extensive automotive business expertise to help customers understand their market position, identify trends, build brand loyalty, conquest new business and gain a competitive advantage. Polk helps automotive manufacturers and dealers, automotive aftermarket companies, fi nance and insurance companies, advertising agencies, media companies, consulting organizations, government agencies and market research fi rms make good business decisions. A privately held global fi rm, Polk is based in Southfi eld, MI with operations in Australia, Canada, China, France, Germany, Japan, Spain, the United Kingdom and the United States. For more information, please visit www.polk.com.

“ ”Seven of the 11 hours spent researching used vehicles occurs on third-party sites.

Figure 2: Why New and Used Vehicle Shoppers Use the Internet

ABOUT AUTOTRADER.COM

Atlanta-based AutoTrader.com, created in 1997, is the Internet’s ultimate automotive marketplace and consumer information website. AutoTrader.com aggregates in a single location millions of new cars, used cars and certifi ed pre-owned cars from thousands of auto dealers and private sellers and is a leading online resource for auto dealers, individuals and manufacturers to advertise and market their vehicles to in-market shoppers. The company also provides a robust suite of software tools for dealers and manufacturers to help them manage and market their vehicle inventory and display advertising on the Internet. AutoTrader.com also owns used vehicle management software companies vAuto, HomeNet Automotive and Kelley Blue Book.

About the Automoti ve Buying Infl uence Study The study contains fi ndings from 4,005 U.S. respondents who purchased a new or used vehicle from a dealer. The study was conducted in September and October of 2010. Our research focused on U.S. vehicle buyers who purchased in the prior three months, but allowed parti cipati on of those who purchased in the prior six months. Quotas were set to ensure a representati ve sample based on the vehicle make purchased.