According to the J.D. Power and Associates 2002 Escaped
Shopper and Owner Loyalty Study released Aug. 28,
the aggressive manufacturer-sponsored rebates and
low-interest finance rates that are resulting in strong auto sales are proving
to be an effective tool in influencing the decision-making process of
new-vehicle buyers.
The study, which examines the reasons why new-vehicle shoppers consider, but
reject certain models, finds that price and incentives play an important
role in why consumers reject one model over another. Among new-vehicle
buyers who rejected at least one other model and who obtained zero-percent
financing, nearly one-half rejected another model because it failed to offer
sufficiently low rates.
"The study shows that shoppers weigh the incentives of one model over
another," said Chris Denove, partner at J.D. Power and Associates. "When
zero-percent financing first hit the scene, it drew people into the market
who otherwise would have delayed their purchase. But now that the newness of
it has worn off, we're seeing that 2.9 percent interest rates will do just
as good of a job in convincing someone to buy one model over another that
doesn't offer a similarly low rate."
Price continues to be the primary reason consumers decide not to purchase a
model they originally consider. The study finds that when someone considers
two or more cars, they usually end up buying the less expensive model.
According to the company, one of the more surprising findings of the study is that salespeople
sometimes cause shoppers not to purchase the models they represent by
turning them off to the entire brand. Overall, 16 percent of vehicles are
rejected due at least in part to the shopper's perception that the
dealership staff was unprofessional or treated them badly.
"Some people get an uneasy feeling about the way their salesperson handled
their business, so they decided to buy an entirely different make rather
than driving across town to find another dealership that sells that same
type of vehicle," said Denove.
The study also shows that some perceptions about vehicles do not always
match reality. For example, Jaguar is one of the most frequently rejected
brands because of reliability concerns. The J.D. Power and Associates 2001
Vehicle Dependability Study however, shows that Jaguar actually
manufacturers some of the most dependable vehicles on the road. BMW and
Mercedes-Benz models are frequently rejected because people believe they are
too expensive to maintain, yet the two brands provide free scheduled
maintenance for the first few years.
"It takes a long time for people to acknowledge product improvements, but
just a moment of bad press to sour the public's opinion of a vehicle," said
Denove. "This is an area of opportunity for manufacturers and dealers to
counter these kinds of misperceptions."
The 2002 Escaped Shopper and Owner Loyalty Study is based on responses from
more than 30,300 new-vehicle owners who registered their vehicle in January
and February 2002.
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a
global marketing information services firm operating in key business sectors
including market research, forecasting, consulting, training and customer
satisfaction.
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