The increase will be realised across dealers' own websites and motoring websites but classified motoring magazines will still fare well.

Dealers increased their online budget significantly last year, spending an additional 35 per cent extra and this year that total is set to rise by a further quarter.

As a result, the study found that regional press and radio marketing will suffer, with car retailers cutting back their marketing budgets for traditional media.

Two-thirds of franchised dealers will reduce spend on offline marketing over the next 12 months - 55 per cent cut regional press advertising in the last year, as well as TV and radio.

Autotrader said the main reason for the advertising shift was that the automotive industry believed that online and classified magazines reached more motorists and generated a better response.

Matt Thompson, marketing director at Trader Media Group said: “Some dealers could be throwing good money after bad on advertising that doesn't produce leads. It is essential that all dealers start evaluating which forms of advertising work and which don't.”

Meanwhile, separate research suggests more work needs to be done by dealers to track leads.

According to a recent survey by 2ND Byte, in 2007 over 50 per cent of dealers did not track leads from regional press adverts, 25 per cent did not track them from their own websites and 50 per cent failed to follow up leads from adverts on other websites.