Auto Dealers Can Drive Sales, Test Drives With Prepaid Cards, Rebates

parago research shows car shoppers most incentivized by cash back, not discounted prices

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Jan 07, 2014, 09:00 ET

LEWISVILLE, Texas, Jan. 7, 2014 /PRNewswire/ -- With a new year's worth of cars and trucks rolling out at dealerships across the country, and sales to be made, fresh shopper research from parago shows that auto dealers aren't delivering the incentives consumers really want. Money "off the hood" is passe, and instead car shoppers report that they are more incentivized by promotions that deliver actual cash back – even if the total cost of the car is higher.

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A new study asked more than 1,300 US shoppers which incentives and rewards most motivated them to make car or tire purchases, take test drives and book car services.

"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, CMO of parago, a global incentives and engagement company. "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."

Key findings from the research include:

Cash back can seal the deal: Shoppers would rather receive $750 on a prepaid card at the time of purchase than $1,000 off the price of the car.
Rebates and price matching get test drivers in the door: 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 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 top incentive for tire shoppers: A $50 prepaid card is the top motivator for consumers looking for tires, over a $60 gift card, a free year of oil changes or even $300 of discounts on future tire services.

More than 1,300 people representative of the US shopper population responded to parago's original survey. The "Five Tips to Drive More Business" infographic can be downloaded here for free.

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