Buying a car: Pain or Joy?
In June I started a still open survey about the car buying process. To. test the thesis for a startup idea I’m working on. The thesis is that buying a car is more pain than joy, and that there is demand for a better way of buying a car.
Why is car buying a pain? Cars have become more complex with each generation by offering more configuration options, driven by:
- Technology (CPUs became much cheaper)
- Mass Customization (allowing customers more choices)
- Regulation (environment and safety)
Mass customization was introduced to better addressing customer needs, because customers asked for more variety. The most likely reason for more variety are different use cases and also cost and safety considerations.
In other words customers got what they asked for.
More configuration options means also much more complexity. A modern premium car like a BMW series 3 is offered with 6 different trim levels. A trim level is basically a pre packaged set of options. Each trim level can be configured with different options and packages.
For a series 3 that means billions of different possible configurations.
There are around 6500 different trim levels in the current generation of cars across all brands, and a further ~12,000 of relevant trim levels for the last 2–3 generations (used cars).
Which means a car buyer is looking at more than 18,000 different trim levels. And each trim level can have billions of different configurations.
In the age of mass customization each vehicle is nearly an individual product.
For a car buyer it means that he is looking at 18,000 * billions of potentially different combinations. That’s the car buying search space. As a potential car buyer I only need to develop an optimal search strategy to find my car …
Well, most car buyers won’t do that, but how people do buy a car?
There are a lot of data what kind of cars people are buying, but not how they are buying a car. Hence my survey.
- How much time do you spend for preparing your car buying decision (research, comparisons, test drive, etc)?
- How much you would pay for an online service, which helps you to reduce and simplify your research effort significantly?
- With how many people you are discussing your car buying?
- Please rank the following car buying criteria in order of importance to you, first being the most important.
- How would you assess the effort needed to make an educated car buying decision, for existing offerings?
- Which kind of online sources do you use preparing your buying decision.
Until today (2019–06–26) 34 people have completed the survey. I will focus on question 1) and 4). I did run two ‘campaigns’ the first was vi a my twitter account and the second one (a week later), I did use Twitter and Facebook Ads. The first campaign (via my Twitter account) reached mainly people from the US and Europe, the second one was geographical completely different and reached people in Asia (mainly Pakistan, and Indonesia).
Currently I have no reason to believe that the priorities are very different geographically. On the vehicle type level there is surely a difference, but not regarding priorities.
64% are spending more than 9 days in preparation for buying a new car, and another 11% do spend 7–9 days. Which means 75% do spend 7 or more days for buying a car. That’s a lot of effort. Unfortunately we cannot know how much time people did spend 20–30 years ago. But probably they did spend less time.
This was most surprising result for me, that the most important priorities for buying a car are:
And that sustainability is ranked rather low. However thinking about it makes perfectly sense, why somebody should buy an expensive car, which is costly to operate, while having a low product and service quality, and which doesn’t serve its purpose?
I also was surprised that social status is ranking so low, because cars clearly do have a social function. Much hyped media / internet / entertainment options also seem to be not that important.
So it’s about Quality, Costs, and Purpose. My idea is currently focused on purpose, and also costs. The survey helped me to give quality more weight. I was thinking about giving much more weight to connected internet / media, but it seems to be not that important.
Looking at blogs, and articles, the writing emphasizing the features of a car and its technical abilities. But you will not find a lot about quality. Hardly surprising because these articles are focusing on new cars which do have little service history.
I think it will be an interesting challenge to get quality data, because data about car reliability, product quality, and service quality are not easily available. Car manufacturers do collect all quality data in great detail, but you will not get direct access to these data.
The survey is still open, and it would be great if you could participate, https://surveyhero.com/c/8fde9179 on average it just takes less than 3 minutes.