The economic influence of the automobile industry can’t be overstated, so it’s incredibly important to understand consumer behavior in terms of new car purchases.
We investigate when people typically buy new autos by looking at trends in the car insurance sector – namely, the top competitors’ shares of spend and monthly fluctuations in the industry’s market traffic.
People often don’t rush to buy a new car. As Car Buyer advises, many wait to take advantage of bargains offered at specific times of the year. As the SOV trend data laid out in the image below indicates, the traffic in the car insurance market peaks during particular months.
From this data, we can deduce that the months when the most people look to insure a new car provide a rough estimate of the periods when the most people buy new cars.
New Car Registrations in March and September
September brings a noticeable rise in traffic, particularly for two of the top three competitors – likely the result of bargains these companies offer before the release of new car registrations. When these registrations come out in March and September, salesmen are usually quick to replace their old stock with cars carrying new plates.
If these cars aren’t sold, retailers keep cutting the cost and offer attractive car financing options (such as interest-free loans, increased trade-in offers or reduced prices). They might even sell them to car rental companies or they will be dumped in many of the new car graveyards around the world to rot.
As the data above shows, most of the featured competitors experience a rise in SOV near the beginning of March, except for directline.com, whose SOV actually declines around the same time.
However, this is a reflection of changes in the general landscape to which they reacted quickly and meant the company was always in the top three advertisers, spending most of its time at the top of the chart.
Rise in Sales at the End of a Quarter
Traffic also increases between November and December, particularly for directline.com and adrianflux.co.uk.
This contradicts the trend we often see at this time of year, when consumers often spend too much money on Christmas shopping to buy new cars, causing a drop in sales. After all, who expects to find a new car underneath their Christmas tree?
But this time marks the end of a quarter, when car dealers often have sales targets to meet. It also marks the end of the year, when these targets only gain in importance. Their eagerness to reach sales targets and deadlines translates into more opportunities (i.e. discounts) for consumers.
This phenomenon likely explains the rise in traffic that a lot of the top competitors experience at the end of year and at the beginning of May – which corresponds with the end of the first quarter.
A few other competing car insurance companies, such as rias.co.uk and swiftcover.com, also see their traffic rise significantly between the beginning of January and February. That rise corresponds with the greater interest people should have in insurance after buying new cars at the end of December.
That’s also usually around the time that dealers release newer models of a car, prompting them to quickly sell older models to make room for the new releases.
That being said, the release of new models may occur randomly to fit in with car shows where consumers are viewing new models, and can therefore be used to explain any sudden increases in the number of people looking for car insurance.
Trends in Share of Spend Versus Share of Voice
The share of spend data in the image above generally matches the trends in market traffic. If there’s a rise or drop in web traffic, a corresponding shift in marketing and advertising spending is to be expected.
Sure enough, Directline.com’s September peak corresponds with the increased traffic that the whole industry sees that month. On the other hand, Comparethemarket.com and octagonsinruance.com both see a noticeable uptick in traffic at the beginning of July.
That said, their success during this period is relatively unique, as their competitors generally experience decreased traffic at that time.
However, while its competitors experience September peaks generated by new plate registrations, Comparethemarket.com sees a decrease in its traffic that month.
As the graph shows, however, a July increase and a September decrease in the company’s share of spend both correspond with shifts in its web traffic, possibly accounting for these anomalies and pointing to an effective advertising strategy of breaking from the industry norm.
We can then fairly conclude that the “share of spend” trend for the top competitors generally corresponds with the trends in traffic, suggesting that advertising strategies in the car insurance market have a significant effect on web traffic.
However, many of these companies would perhaps be wise to follow their competitor’s lead and attack the less popular months in car sales. With Adthena’s Market Insight and other competitive analysis tools, you can remain informed of your competitors’ actions and keywords and your own, ensuring that you can take advantage of any opportunities the market offers.
(Main image credit: Jari Lehtinen/flickr)