Daytona Beach, Fla. - It may be the second most expensive purchase of most people's lives, but new research from DMEautomotive (DMEa) reveals that a growing number of Americans are bypassing test-drives – and making strikingly few visits to dealerships – in their car-buying process.
The latest survey of roughly 2,000 automotive consumers found that, before purchasing, 16% took no test-drive and 33% test-drove only one car. And more than two-thirds (68%) reported that they visited only two dealerships or fewer before buying - with 40% visiting only one dealer.
The survey also measured consumer trust of dealer salespeople, and the results were sobering: only 21% claimed they perceive them as "trustworthy," a lower trust rating than reported for lawyers, mortgage brokers and insurance salespeople.
"This avoidance of physical dealerships is in stark contrast with how much online vehicle research is happening: 4 in 5 people now use the Internet for car buying, visiting 10 auto Web sites in the process," said Mary Sheridan, manager of research and analytics, DMEa. "More people are stealthily comparison-shopping dealerships and inventory online, and then swooping in to buy when their minds are already made up. Dealerships can no longer rely on in-store visits and the old 'be-backs' to drive sales: they need to have the most powerful online presence wherever dealer/vehicle selection is happening, and work far harder to keep customers close throughout the ownership cycle, using every retention marketing tool possible, like a constant-connection mobile app."
KEY FINDINGS:
Few Test Drives: The average new vehicle may cost a record $32K+2, but roughly half (49%) of buyers report only test-driving one (or no) vehicle before purchasing their latest vehicle. On average, car buyers test-drive only 1.9 cars pre-purchase, with just over a quarter (26%) test-driving 3 vehicles or more.
Even For Used Cars: Conventional wisdom is that used-car buyers at dealerships take significantly more test-drives (as each vehicle is unique), but the DMEa study reveals that is not the case: 30% of used buyers test-drove only one vehicle (vs. 35% of new buyers) – and a greater percentage of used buyers (18%) than new (14%) reported taking no test-drives.
Young More Likely to Test-Drive – Women to Avoid: Car buyers under 35, who may be more enthralled with the newness of the car-purchasing experience, are slightly more likely to take test-drives and try out more vehicles. For instance, 57% of those under 35 test-drove more than one vehicle (vs. 48% of those over 35) – and 33% test-drove more than three (vs. 23% of those over 35). But women, who influence 85% of all car purchases, were bigger test-drive avoiders: 19% skipped it altogether, vs. 12% of men.
Few Dealerships Visited Pre-Purchase: The survey found that 68% of car buyers visit two dealerships or less – and only 15% visit four or more – before buying. Overall, car buyers only visit 2.2 dealerships. So, this new DMEa data confirms recent industry research like that from McKinsey that found that car buyers visit 1.6 dealerships before buying – plummeting from 5 just a decade ago.
Used buyers make slightly more dealership visits (to search inventory) than new buyers: for instance, 38% of used buyers visit 3+ dealerships, vs. 28% of new. Overall, new buyers hit 2.1 dealerships on average, vs. 2.3 for used buyers.
Young Less Dealer-Averse; Women More Dealer-Averse: While all ages/genders report a low number of dealership visits, a bright spot for dealerships is that car buyers under 35 make slightly more visits than their older equivalents. Sixty-three percent of those under 35 visited two or more dealerships, vs. 53% of those over 35 - an indication that dealers should focus on delivering a modern retail experience, integrating the digital and mobile forms of shopping and purchase that millennials have come to expect.
Women, again, show more pronounced dealer avoidance: 46% of women visited zero or one dealerships to look at inventory, vs. 41% of men.
Car salesperson trust problem: Car buyers rated dealer salespeople on a "trust scale," and a dealer image problem persists: a significant majority (56%) rated car salespeople untrustworthy - another 22% reported they "neither trusted/distrusted them" – and only 1 in 5 placed them in the trustworthy column.
Perhaps surprisingly, nearly twice as many car buyers under 35 trust dealer salespeople (30%) than those over 35 (17%). But again, dealerships have a notable "woman problem": only 19% of women trust their salespeople, vs. 24% of men.
How Trust in Car Salespeople Stacks Up: The survey found that only 5% of consumers trust car salespeople more than doctors – 20% trust them more than lawyers - and 21% trust them more than either insurance salesmen or mortgage brokers. One small consolation: more people trust dealer salespeople than either politicians (57%) or telemarketers (59%).
