Do Dealers Really Treat Customers Differently Because of Gender?
CarWoo set out recently to refute a longtime belief that dealers treat customers differently because of gender.
Turns out, CarWoo’s analysis showed that in 80 percent of cases, there was no difference in either offers extended or negotiation styles based on the buyer gender or dealer gender. Officials said their study reviewed marketplace transactions for vehicles of the same make, trim and option package in the same geographic area to get a good understanding of trends.
However in 20 percent of the cases, CarWoo conceded there was a significant difference in offers extended to men versus offers extended to women.
Here’s how the company arrived at these determinations.
CarWoo set seven parameters to create a sample of deals started by both men and women:
—Limited to one major metropolitan area in the U.S.
—All deals were for the same make and model of vehicle.
—The deals were started in same time frame within two to three weeks of each other.
—Limited to a vehicle with a small option set.
—Limited to new units with an MSRP of less than $40,000.
—Limited to buyers where there was no ambiguity of gender, such as someone named Pat or Chris. CarWoo stressed that its program is anonymous but it does show the buyer’s first names to dealers.
—The same set of dealers was observed across the trial period.
Drilling down deeper in the study results, CarWoo indicated 65 percent of dealers offered the exact same price to both men and women. When there was a difference, the company said 15 percent of dealers made an offer with a price difference being less than $500, while 20 percent presented a deal with a price difference greater than $500.
For those dealers who presented offers with the greatest difference, CarWoo wanted to learn why. Here are two responses the company shared.
“It’s a negotiation, and you have to size up the person who’s across the table from you,” one dealer stated. “If I sense that person is going to be a strong negotiator, I might set my price higher.”
Another dealer shared that “there are cultures where negotiation is a part of life. In some in fact you lose face if you don’t negotiate. Culture impacts my pricing because the price I sell the car at determines how much I get paid in the end.”
“What is surprising in this data is not the 20 percent of the cases where there is a significant difference. The eye-opener is that 80 percent of the time there is no difference at all. That is certainly not what people commonly believe or expect,” declared Peter Chiu, vice president of product management for CarWoo.
“Beyond the raw data, we also interviewed a number of dealers, and in the cases where there was a consequential difference in the offers, it seems that this was not a case of gender bias, but rather was a case of a skilled negotiator making a judgment about how best to close a sale,” he continued.
Tommy McClung, chief executive officer of CarWoo emphasized that this study showed how important the company service can be to connect shoppers and dealers together.
“The CarWoo marketplace data is a rich repository of real time market data. We see thousands of transactions per month and are constantly reviewing this data to extract value for both consumers and for the auto industry,” McClung explained. “This analysis represents a particularly significant finding in an industry where distrust is rampant."