Enticing car buyers to make purchases with incentives is not a new concept. It has long been known that those in this market can be swayed based largely on what they receive in return for their purchases of products and services. The most crucial choice in this process lies in deciding on the most effective type of incentive to offer. Cash back rebates on prepaid cards and discounted prices are the two most common ways to incentivize consumers. Which of these is most appealing to the buyer?
A new auto study published in Incentive Magazine by Deanna Ting surveyed 1,300 U.S. consumers. It showed that auto shoppers are more motivated to make car or tire purchases, take test drives, or book car services when offered cash back rebates—typically administered on prepaid cards—not discounted prices.
This logic is not difficult to understand when you consider that a $1,000 rebate on a prepaid card at the time of purchase is much more appealing than the same value discounted over the life of an automotive loan. Saving $1,000 on the final price of the car will result in a miniscule decrease to the monthly payment over the life of even a short three-year loan. Additionally, people naturally enjoy instant gratification over delayed payoffs.
Further findings from this survey:
- Rebates encourage test drives – The survey showed that a $500 after purchase rebate in addition to a $50 prepaid card is the most compelling formula for increasing the number of test drives taken.
- Incentives strengthen service loyalty – Consumers said they would change their behavior and remain loyal to a particular dealer if they were given a $100 prepaid card for every year of service at that dealership and a $10 prepaid card for every service performed there. This is a fundamental way to ensure that your customers remain loyal to your dealership over others.
- Prepaid cards are the best incentive for tire shoppers – A $50 prepaid card is the strongest motivator for those in the market for tires. Surprisingly, it is even more effective than a $60 gift card, a free year of oil changes, and even $300 worth of discounts on future tire services. Again, instant gratification wins out over future savings.
In light of these revelations, prepaid rebate cards should be a prominent part of your 2014 strategy for improving automotive revenues and increasing the loyalty of your customer base.
For more information on why prepaid debit cards are so effective, check out our free whitepaper on prepaid debit cards: http://www.jnrcorp.com/resources-whitepapers#whitepaper3.
By JNR Corp
Written by Kristopher Hewkin