A couple weeks ago, JiWire demonstrated that people are willing to travel farther for better deals. This information is useful for advertisers because it proves that if people know where the biggest saving is, they will travel to get it. It doesn’t really help buyers all that much, since they have to know, in advance, where the best deal is.
At CarWoo! we started out with an assumption that by being willing to travel, people would get better deals. If folks would much rather travel to the closest location than save money or receive another convenience, then these folks would probably prefer to just hop on over to their local car dealer and take whatever price they can get.
But there is a slight issue with the JiWire post – from the buyer’s perspective it requires clairvoyance to know where the best offer is, and it sort of sounds like everyone is always farthest away from the best deal (sort of like the Escher wood-carving of the staircase that always just goes up.)
The fact that most people would travel farther for a better deal doesn’t perfectly translate in a world in which not everyone needs to. I mean, in what reality would everyone have to drive 2+ hours for a 100% discount? Can’t the fellow just down the road from the uber discounted store get the deal as well? Before we start wondering how far people would hypothetically drive for the best deal, shouldn’t we do some research on how far most people actually need to travel to save money?
To check out how these thoughts model themselves in the real world, I poked the CarWoo! marketplace, which is the collection of data around real car offers created when people use the CarWoo Plus Plan, for data on Toyota Priuses (2010 and 2011 5-door Hatchback II’s only) to see the range in prices for CarWoo! buyers around three zip codes in the the SF bay area.
I displayed what I found in this infographic.
The average buyer from 94404 would have to travel more than 20 but fewer than 50 miles to get the best deal on their new car. But the average buyer in 94102, interestingly, would only have to travel fewer than 20 miles. No one in these three zip codes would have to travel more than 50 miles to get the best deal. In fact, if they did, they would end up, on average, taking higher-priced offers. This data demonstrates that dealers closer to San Francisco offer better deals on new Priuses. But this pattern wouldn’t necessarily repeat for every metropolitan area.
So it’s not size of drive that matters, it’s whether or not you know where to go. Maybe the shop around the corner can offer you the best experience, or maybe it’s the guy in the next town. Getting a great deal isn’t about being wiling to travel, it’s about knowing how to ask around.
Which leads me to…the woo
So if the deal isn’t about the drive…what is it that ensures the best way to buy a product?
To continue with the Prius theme, I checked out Prius deals in which buyers had asked for offers on 2010 and 2011 Toyota Prius Hatchbak II’s. In this case, I organized the deals by the number of offers each deal had and averaged out the highest percentage savings offered by each buyer.
As you can see, buyers who reach out for more prices in their immediate area are statistically more likely to get better deals – even if, come to find out, these deals are right in their own backyard (lucky residents of 94102!).
These stats also prove that getting the maximum number of offers from the greatest number of dealers is the way to go if you’re really looking to save money on your new car.
While the CarWoo! model is one application of these findings , this is an assertion that can be put into real-world practice in many purchasing scenarios. When you’re shopping for the best price, work smarter, not harder. Place a few calls or shop around the internet before hopping behind the wheel to comparison shop in person. It’s a green practice that’ll save you a good bit of green as well.