A new auto consumer study conducted by global incentive and engagement provider Parago shows that car shoppers are most incentivized by cash back instead of discounted prices. The study, which surveyed more than 1,300 U.S. consumers, asked them which incentives and rewards would most motivate them to make car or tire purchases, take a test drive, or book a car service.
“Interestingly, our research showed that consumers are more motivated by cash in hand than money off the total price of the car, likely because they see a stronger value in immediate rewards versus an unnoticeable difference in financed payments,” said Rodney Mason, chief marketing officer of Parago. “Auto dealers and manufacturers should take this as a directive to shape their 2014 promotions: Rebates and prepaid cards will get shoppers in the door and behind the wheel.”
Among the survey's key findings were the following:
- Cash back works: Shoppers would rather receive $750 on a prepaid card at the time of purchase than a $1,000 discount off the price of the car.
- Rebates and price matching motivate test drives: Consumers report that a $500 rebate after purchase paired with a $50 prepaid card is the most compelling incentive to test drive. A dealer price-match guarantee or promise of $200 is also a strong motivator.
- Incentives can produce service loyalty: Shoppers would change their behavior for a $100 prepaid card for every year of service at the dealership, and $10 loaded on a prepaid card for every service drives dealer preference.
- Prepaid cards are the top incentive for tire shoppers: A $50 prepaid card is the top motivator for consumers looking for tires, moreso than a $60 gift card, a free year of oil changes or even $300 of discounts on future tire services.
An info graphic detailing the results of the survey can be found here