The car-buying market is coming back from a very challenging 2020, but it is still a far cry from where it was pre-pandemic. Increased vaccination rates and relaxing restrictions mean more foot traffic than before, though not to levels seen in 2019 and prior.
Interestingly, there’s a bit of a paradox going on here. The market has grown in some ways because of consumers looking to avoid public transportation, but it has also shrunken a bit because of less wear-and-tear on the cars of those still working from home.
A Shift Toward Pre-Owned
Interest in pre-owned vehicles has also seen a resurgence, thanks in part to new car affordability and supply issues.
Many consumers and families have essentially made it through the pandemic financially unscathed. However, many others have faced severe financial hardships, including job loss, costly medical bills and other serious setbacks.
Dependable late-model vehicles are increasingly seen by budget-conscious drivers as affordable alternatives to new cars.
With no immediate end in sight to supply chain issues and the lack of new car inventory, many consumers may prefer the availability of choice on pre-owned lots. After all, not everyone can or will wait around for the latest car model to become readily available.
More Convenient, More Digital
Consumers have grown used to many of the newfound conveniences of car shopping during 2020 and 2021, including:
- Digital retailing, or the ability to build a deal online before finalizing the transaction at the dealership
- At-home test drives and vehicle delivery
- Contactless vehicle pick-up from sales and service
- Enhanced online car shopping tools and resources
The great news for auto dealerships is that as the car buying process becomes ever more efficient, consumer satisfaction levels tend to increase. This is an area where dealers can genuinely differentiate their operations and customer experience to win new business.
Consider these stats:
- 92% of auto purchasers research online. (ThinkWithGoogle)
- The purchase journey is happening online, but the purchase often still occurs offline. (ThinkWithGoogle)
- Buyers spend nearly half of their time at a dealership on negotiations and paperwork, and these are the two steps that 1have historically had the lowest satisfaction ratings. (CoxAuto)
- On average, “Heavy Digital” buyers reduced their time at the dealership by more than 40 minutes compared to “Light Digital” buyers; the greatest time savings came from negotiating price and signing paperwork. (CoxAuto)
- 61.4% of car buyers prefer to buy from a dealership. (TheZebra)
There are plenty of good times ahead for dealerships that can effectively react to consumer shopping patterns and embrace the shift to an increasingly hybrid buying experience, where both digital and in-person interaction play key roles.
Next up for our Q3 Playbook is Customer Experience Still Reigns, check back soon for this piece!