automotive

Automakers Need To Heed Buyers' Wishes Re: Dealerships

Cox Automotive is releasing its annual report on car buying behavior on Wednesday, and there’s nothing in it that should shock any of the automakers, who continue to struggle to change their dealership experiences. 

Here’s the deal to anyone not privy to the inner workings of the auto world: There has been a struggle between automakers and dealers since the beginning of time. I suspect if Fred Flintstone were an auto dealer, he would have had trust issues and power struggles with Footmobile Motor Co. You can actually have one of those Footmobiles updated with an engine, per Reuters, but I digress. 

The seventh annual 2018 Cox Automotive Car Buyer Journey, commissioned by Cox Automotive through IHS Markit and based on a survey of more than 2,000 recent car buyers, revealed car buyers spend 60% of their shopping time online, and more than three-quarters (78%) of car buyers use third-party sites, like Autotrader and Kelley Blue Book. 

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Shoppers are spending less time in-market for a car. The biggest decrease is among used car buyers, as two in three state they need, rather than want, a new vehicle.

While it’s clear the time to influence and convert car shoppers begins online, the in-store dealership experience continues to be a sore spot with buyers. According to the study, the typical car buyer in the U.S. spends more than three hours in the dealership from start to finish. For half of new car buyers in America, that’s entirely too long. 

Buyers noted they spend nearly 40 minutes idle while at the dealership, which has the potential to lead to frustration in finalizing the sale as some buyers start to rethink the deal. Additionally, the majority of shoppers (64%) noted the financing and paperwork took longer than they expected. The test-driving process and interaction with sales people were the most satisfying parts of the journey at 77% and 73%, respectively.

“While this study reaffirms the directive that dealers need to reach consumers online as early as possible in their car buying journey, they should not overlook the need to enhance their in-store experience, which ultimately impacts the final purchase decision,” said Isabelle Helms, vice president of research and market intelligence at Cox Automotive. 

Cox is offering a way to help dealers optimize their online presence via its new Accelerate connected retail solution, which works across Autotrader, Dealer.com and Kelley Blue Book. It’s aimed at driving operational efficiencies while improving the overall customer experience.

The Lincoln Motor Co. is one automaker acutely aware of the annoyance that car buyers have with the lengthy amount of time that they must spend at dealerships during the purchase process. 

The automaker continues to tweak its “Lincoln Way” pilot program designed to make the sales and ownership experiences more effortless. Currently in a pilot via 10 dealers nationwide, the service includes test drives and sales completion at customer homes. After purchase, it continues with pickup and delivery for maintenance services. It includes an app which enables customers to see where their vehicle is at in the process.

Seventy-five dealers have applied to be in the program as it expands, and the automaker is currently reviewing those apps, Robert Parker, Lincoln’s director of marketing, sales and service, told me at the Los Angeles auto show. 

Clearly, more automakers need to follow Lincoln’s lead if they want to attract and retain customers. Understandably, dealers worry that if you move sales away from the dealership, the next step is getting rid of dealerships altogether. But there will always be a need for sales people; it might just look a lot different than it did at Footmobile Motor Co.

4 comments about "Automakers Need To Heed Buyers' Wishes Re: Dealerships".
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  1. Christina Ricucci from Millenia 3 Communications, March 20, 2018 at 10:08 a.m.

    Tanya, you say "it's clear the time to influence and convert car shoppers begins online...."

    Unfortunately, dealerships seem unable to keep their websites current. I just bought a new car in GA three weeks ago. I'm diligent in car-shopping, relying on Consumer Reports, Car & Driver, reviews from other owners, etc. Having done all that and finalizing my decision after two test drives, I had VIN numbers on 6 different cars at my dealer which I should have been able to choose from. It turned out only one was still available; the others had been sold but were still listed online. I liked the one left in stock--it's eye-catching and a superb driving experience--but I was annoyed that I'd wasted time in the search process, looking at each vehicle with my specs and recording VINs so I'd be prepared. My total time at the dealer was 5-1/2 hours. I had an excellent rep, but at least 2 hours were wait time. And this was a cash purchase, no financing! I was cranky enough after 4 hours to walk the deal, but what would it have gained me? Starting all over with a dealer farther from where I live and work? I had a nearly identical experience five years ago with a dealer in MD, and in that case, I DID walk out with no car. It's not supposed to be this difficult.

  2. Tanya Gazdik from MediaPost replied, March 20, 2018 at 10:20 a.m.

    Christina—thanks for sharing your experience, it’s all too typical, I’m afraid, and there lies (part of) the problem. I’d like to chat more, can you please email be at tanya@mediapost.com? Thanks!

  3. James Smith from J. R. Smith Group, March 20, 2018 at 4:30 p.m.

    Christina:  There's probably no ethical or consumer centric justification for not updating the online listings.  That said, remember, once you are "in the dealership, talking a deal" you are on their turf and they can read your anxiety, nonverbal communication cues and so on.

    Per article below, the average "buy" takes about 4 hours (2016).  This details the probable valid reasons for some of the delay.
    https://www.edmunds.com/car-buying/behind-the-scenes-at-a-car-dealership.html

  4. Ron Kurtz from American Affluence Research Center, March 26, 2018 at 4:42 p.m.

    The purchase of a new car can be a worse experience than having a tooth pulled.

    First, one has to go through the negotiation process where the sales associate is going back and forth with the sales manager to "try to get a good deal" for the customer. Sure. And if even you have done a good job of trying to identify dealer cost and available incentives, you will be treated as though you are a dunce.

    Then after agreeing on price (and value of trade in, which is also a hassle) you learn about the extra costs like "acquisition cost" (that should be included in the cost of the car or simply an operating expense for the dealer). What other business charges you a service fee for buying something from them? Then the customer has to get past the paper work and extra charges from the financial person. 

    There must be a better way. There is, but dealers have to stop looking for ways to get more revenue from the customer through various deceptions. 

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