The dealership used to hold the power in the purchase decision. Now your customer holds the keys. Read up on these consumer car-buying trends and how your dealership can compete in today’s modern market.
1) Millennials lead the way
Millennials have the highest purchase intent across any generational group. According to the 2018 Mintel study, 34 percent intend to purchase a vehicle in the next 12 months. As millennials advance their careers and become parents, they will continue to become the most critical car buying group over the next decade.
Millennials have very strong online preferences and expect to have a seamless omni-channel experience. Providing customers a seamless car-buying process is likely to escalate into transacting online over the next three years. When communicating with millennial customers, email is the least preferred method, followed by phone calls. Text and chat will continue to rise as the preferred methods for communicating with dealer personnel.
2) Women find car-buying even more stressful
Two thirds of consumers believe buying a vehicle is a stressful process.1 This number jumps up to 79 percent for women aged 18-34.1 The automotive industry has been traditionally male-dominated and women are more likely to consult outside help from a friend, family member, or mechanic when purchasing a vehicle. A vehicle is also likely to be the second largest purchase a consumer will make, after a home. Considering 56 percent of consumers would buy more often if it wasn’t so difficult2, dealers should update their process to make it less stressful, such as a return policy, included maintenance, and no-haggle pricing. Decreasing the time it takes to complete a purchase and being as transparent as possible will also improve the customer experience.
3) The car search begins on mobile
Not surprisingly, 95 percent of car buyers search online for information3 and they’re spending an average of 14.5 hours online before purchasing.4 Sixty percent of those searches are happening on a mobile device.5 Searching online is by far the most commonly source of vehicle information, above word of mouth, television ads, and even dealer visits.5
This trend shows how critical it is for dealers to prioritize mobile and their online inventory. If your vehicles aren’t online, they aren’t for sale. Customers are viewing hundreds of different vehicles during their search, how will yours stand out? Real, professional quality photos, full factual descriptions, and accurate prices. In addition to vehicle prices, customers are looking to see the full purchase price including F&I. Best-in-class dealers will share dealership reviews prominently on their website to drive online visitors to their store.
4) The trade-in process is a customer pain point.
The trade-in process often creates tension and distrust between the dealership staff and potential buyers. “Customers feel they are getting a low-ball offer and the dealer is trying to steal their car,” says MAX Digital EVP Mike Cavanaugh. The solution? Involving your customer in the trade in process. Ask buyers to help evaluate their own trade-in, handing the customer an iPad so he can go through the appraisal alongside the staff, providing information on the car’s condition and history. E.g. “If a 1 was bald tires and a 10 was brand new tires, how would you rate your tires?”
This process allows you to bridge the gap between the purchase offer and the value the customer thought their vehicle was worth based a third-party source such as Kelley Blue Book. A collaborative process helps make sure that the stress of the trade-in negotiation doesn’t wreck a potential deal. It works immensely better than a dealer handing the customer a piece of paper with a number scribbled on it.
Today’s consumers are not only in control, they have high expectations. Understanding the trends, and more importantly, adapting your processes to fit your customers’ needs, will ensure your dealership is positioned to succeed for years to come.
To learn how MAX Digital can help you meet customer’s high expecations schedule a personalized demonstration of our road-tested tools.
1 2018 Mintel Car Purchasing Process, U.S.
2 Driving Sales Customer Experience Study.
3 Google/TNS Auto Shopper Study, 2016, U.S.
4 2018 Auto Trader Study.
5 Kantar TNS/Google, “The Drive to Decide 2017”, U.S. 2017.