11% bought their cars online, 9% through newspaper ads

Car shoppers are now empowered by the Internet. Most of the estimated 61 mln consumers who bought a new or used car last year began their search on the Internet. In 2004, Web sites generated 22% of all new-car sales. Over the past decade, person-to-person auto sales have increased by more than 20%. Private-party sales now match the number handled by independent used-car dealers and could soon pass franchised auto dealers. Among Internet users, 11% said they found the used car they ultimately bought online, while only 9% said they found their car in a newspaper classified. This massing of audience spurred a jump in online automotive ad spending last year. While the overall automotive category grew at a rate of about 2% in 2004, the Internet portion grew 51.5%, to $1.2 bln. We project that the Internet category will grow to nearly $2 bln by 2006, accounting for 6.4% of all dollars spent on auto sales advertising, according to Borrell Associates.