Web Usage for Used Vehicle Purchases Growing

FRAMINGHAM (08/14/2000) - Almost one-third of U.S. households that purchased a preowned vehicle between last fall and the spring this year used the Internet in the buying process, according to a new study released by Gartner Group Inc. in Stamford, Conn., today.

The study, which surveyed 40,000 U.S. households between September 1999 and March 2000, showed Internet usage increased by almost 50% over last year for used vehicle purchases. But while 31% of consumers searched for competitive information and used vehicle inventories online, only 1% purchased actually purchased a vehicle online.

"Internet usage is growing for both new and used cars," said Thilo Koslowski, an automotive analyst at Gartner Group. Still, consumers are slower to use the Internet for used-car purchases than for new ones. But [Web usage] is picking up."

Koslowski cited consumer concern about buying a "lemon" as the greatest inhibitor to Internet purchases of used vehicles.

"You can't kick the tires online, so companies have to parade trust by offering warranties showing that their service is reliable for used vehicles," he said.

Koslowski touted initiatives by used-car broker iMotors.com in San Francisco and Web auctioneer eBay Inc. as making strides in addressing the "lemon" factor. iMotors offers a seven-day return policy on used vehicles. Last month, eBay Inc. launched a program with Ford Motor Co. subsidiary Saturn to offer inspections of used vehicles sold through its auction service.

Of the households surveyed, 79% indicated an interest in using the Web for their next used-vehicle purchase. The Gartner study also showed 13% of used-vehicle shoppers had an interest in buying their next vehicle online.

J. D. Power & Associates in Agoura Hills, Calif., pegs the used-vehicle market at $370 billion annually.

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