According to a Maritz Poll conducted earlier this year by the Maritz Automotive Research Group, 75% of consumers say they prefer a low retail price without incentives to a higher price with incentives. However, recent consumer buying behaviour does not reflect this opinion.
According to the latest poll by Maritz, car makers that offered employee pricing incentives last summer are seeing lower sales this summer as they attempt to stick to a strategy of offering vehicles at a low retail price without customer incentives.
"It's clear from the poll that consumers say they don't want to play the incentives game, but their buying patterns are inconsistent with what they say," said David Ensing, director of research and development for the Maritz Automotive Research Group. "They say they want everyday low prices; however, their behaviour indicates that they have been conditioned to wait for the 'big sale'. There's little urgency to buy a vehicle unless there's a large discount."
Drivers of preference
The top reasons respondents cited for preferring EDLP (everyday low pricing) included:
- Better deal 68%;
- Easier process 58%;
- Smaller down-payment 48%;
- No worry of better incentives 35%;
- Easier to get outside financing 27%.
However, those who said they prefer customer incentives cited the following reasons:
- Helps the negotiation process 58%;
- Less out-of-pocket expense 50%;
- Gets the lowest overall price 47%
"This data may hold the key to helping automakers avoid sales slumps that have resulted from consumers waiting for the deep discounts," concluded Ensing. "If the automotive industry can showcase the appealing benefits of everyday low prices - including getting a better deal, creating an easier process and making a smaller down payment - with the same level of marketing support they give incentives and sales, consumers' actions might become more consistent with what respondents said they wanted when buying a car."