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Jared Hamilton
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Arvid Linde

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How are Car Safety Ratings Affecting Sales Figures


 The car industry has changed dramatically over the years, and it could be argued that some of the bigger changes in the industry – particularly in terms of consumer behaviour – have come since the onset of the global financial crisis at the end of 2008 and beginning of 2009.

The biggest and most noticeable change was, of course, that consumers had less money. As a result those looking to buy a car have been a lot more on the ball about making sure they spend their money wisely – after all, buying a car is an important decision and one that involves many thousands of dollars, and it makes sense to ensure the purchase will go the distance, so to speak.

Car insurance costs are the bane of their lives for many people, while for others it’s a life saver after an accident leaves their vehicle written off. What’s for sure is that insurance is essential (and not just because it’s a legal requirement) and can be a great metaphorical airbag. It’s also one of the first places consumers look to save money. But a lot of consumers are admittedly ignorant when it comes to understanding insurance – or at least they were until they took the time to look into it.

Safety Ratings Sell Cars

Every car has a safety rating (by IIHS), and it is this which plays a great part in insurance companies deciding how much premiums will cost. Car safety is an obvious need, but it’s only recently come to light how seriously consumers are now taking it – and more because of the financial implications than the practical safety aspects.

For example, the Australasian New Car Assessment Program revealed earlier this year that cars that were rated five stars for safety had dominated sales in New Zealand and Australia: 70% of cars sold in Australia between January and March were rated 5 stars. This was, in part, a response to the Australian government’s ‘Stars on Cars’ campaign, which sought to educate car buyers of the safety of the model they were considering purchasing.

Research prior to the launch of the campaign had revealed that only 26% of potential car buyers didn’t consider a vehicle’s safety rating at all, but it’s clear that this has now changed and even more people are paying attention.

Although people may seem careless when it comes to safety, they're not. In 1983 when the auto manufacturers were obliged to install seatbelts, people instantly jumped on the new trend and a study revealed that 90% of drivers were wearing the seatbelt voluntarily even though the police didn't issue fines for not wearing a seatbelt back then.

Educating the Dealers

For car dealerships in Australia, training on the Stars on Cars campaign is available which helps dealers to understand – and to explain to potential customers – what the difference between the star ratings means in reality. In addition, dealers will learn how safety scores are calculated, and by the end of the one-off lesson dealership workers can explain the ANCAP safety ratings, and will know how best to pass on their new knowledge to their customers.

It is a very interesting example. We too need to educate our sales team to understand the safety ratings system and even better - to understand the technology behind the car safety systems!

It is of course self explanatory as to why consumers should want to drive cars that are rated five stars for safety., and it’s just a shame that it took a global financial crisis (indirectly, at least) to bring about this change in consumer behaviour and attitude. But still, cheaper insurance premiums and safer cars and roads? It’s a win-win.

Tell the Customer about Safety

So, what does this mean for us – people who are selling cars? I've found that dealers don't do enough to highlight the safety features of the cars they sell. This is wrong! The takeaway is simple – you'll sell more cars if you give the customer a good reason to buy this particular car. Is this car safe? Does it emit less CO2? Brilliant, now tell this to the customer and you might be one step closer to making a sale because people love safe cars!

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