Owning a car is regarding more than the utility of getting from point A to point B. For many new car buyers, it’s a milestone, whether it’s a long-overdue upgrade or a first car marking a foray toward independence. .
But the way car buyers think regarding and approach the buying experience varies, and may differ from the way dealers view the process.
The Capital One Car Buying Outlook 2023 report, a recent study into car buyers’ and dealers’ perceptions of the car buying experience, found that trust and transparency are key components of car buying.
The study revealed opportunities to strengthen the car buyer-dealer relationship, including the opportunity for dealers to improve transparency by simplifying the process with enhanced digital tools and providing a cohesive experience between the online and in-person elements to satisfy buyer preferences.
Here’s what you need to know regarding some of the main survey findings.
Car buyers crave trust and transparency
Since a vehicle is often the second largest purchase in a person’s life, it is perhaps not surprising that trust and transparency are important factors when it comes time for potential car buyers to research and buy a car.
The survey found that trust is vital to dealer relationships. Car buyers who trust dealerships are four times more likely to say buying a car is a transparent process than those who distrust dealerships.
Additionally, 88% of car buyers say trust is important when working with a dealer, and 55% say they’d be willing to pay a little more for a car if it came from a dealer they trust.
Building trust often comes down to clarity regarding the bottom line: Car buyers and dealers agree that transparency in the car buying process means fair pricing and financing.
More than three-quarters (77%) of car buyers say dealers should provide more information up front regarding pricing and financing, so car buyers are better informed.
At the same time, 50% of car buyers indicate that a deal typically falls through during price negotiations and financing discussions, reflecting the need for more transparency in these parts of the experience. shopping.
About a third of car buyers say that the final sale price (35%), price negotiations (33%), and whether they are getting a fair deal (33%) are the parts of the car buying process that they more need greater transparency. .
Enhanced digital tools can help improve transparency
The study highlighted the opportunity for digitized financing to help improve the car buying experience. The majority (67%) of car buyers want dealerships to improve their digital tools to facilitate a simpler buying experience.
Nearly half of car buyers who used digital financing tools said the car buying experience became easier (45%) in the past year, while car buyers who did not use digital financing tools said the process became more difficult (50%). .
But there’s room for improvement when it comes to that all-important transparency: More than half (55%) of car buyers and 68% of dealers said that inaccurate financial estimates provided by third-party digital tools don’t match up. fees and final payments. .
The takeaway for distributors? When offering digital resources, particularly financial ones, accuracy is important. When a buyer sees a potential price online, they want it reflected when they visit the dealership.
Digital and in-person experiences are important, and need to be consistent
When it comes to the buying experience, car buyers want options. One-third (33%) of car buyers prefer to shop at dealerships that offer online and in-person shopping experiences.
While more than four in five (83%) car buyers say that at least half of the buying process happens in person, car buyers and dealers agree that the initial stages, including most of the preliminary research, are conducted primarily online.
Today’s car buyers say that understanding financing options (52%) and discussing financing and pricing (59%) are mostly or entirely done in person.
At the same time, research on vehicles (47%) and local inventories at nearby dealerships (43%) was conducted mostly or entirely online, reflecting the need for integrated approaches to car buying.
Here, too, are opportunities for dealers to ensure a consistent approach throughout every element of the car buying process.
Providing detailed information through tools on a website can help car buyers early in the process, but it must be accompanied by in-person support that also clearly communicates detailed information to car buyers.
Buyers are more likely to be frustrated if they read or hear one thing online and another at the dealership.
Keep in mind that economic factors play a role
Of course, recent economic conditions also shape perceptions of the car buying experience. With factors like inflation and market volatility affecting the current auto buying landscape, it is perhaps even more important for dealers to consider ways to instill confidence in buyers who have been affected by recent ups and downs.
Inflation (57%), used car price increases (40%) and gasoline price increases (40%) are cited as the top three economic factors affecting most recent vehicle purchases in the United States. car buyers.
Currently, dealers seem to be more optimistic regarding the economic outlook than car buyers. Dealers may be more optimistic that they are emerging from the pandemic-era auto market marked by vehicle inventory shortages, price fluctuations and affordability challenges, but they would be remiss to ignore buyers’ concerns.
Of car buyers who indicated that economic factors had affected their next purchase, more than a third (38%) are waiting until they have more confidence in the economy, while 35% are waiting until they are more financially stable and a quarter part (25%) have stopped buying their car.
Dealers have the opportunity to build trust by prioritizing transparency at every stage of the car buying process. They can help foster this trust by creating a consistent experience and connecting digital tools that help drive transparency with integrated elements of in-person and online shopping.
Such steps can help dealers anticipate and adapt to changing consumer needs as car buyers embrace a blended online and in-person shopping experience in 2023 and beyond.
Source: USA Today
