DMEautomotive research is showing that 1 in 6 car buyers are passing on the test-drive and almost half are only visiting one dealership (sometimes none) before buying.
Is the way people shop and buy cars changing dramatically again? Will this coming trend be a problem or an opportunity for dealerships?
In DMEautomotive's most recent survey of approximately 2,000 consumers, they found that 16% took no test drive at all and that 33% only drove one car. They also found 68% reporting that they went to just two dealerships or LESS before making a purchase. 40% only went to one dealership.
The other interesting measure from this survey was that of consumer trust of dealer salespeople. 79% of consumers found salespeople untrustworthy. This is a trust rating lower than lawyers, mortgage brokers and insurance salespeople. This is also an huge opportunity for dealerships.
Dr. Mary Sheridan, Manager of Research and Analytics at DMEa pointed out in their press release that, “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 websites in the process. 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.”
Below is a list of the Key Findings, but the take away should be this, the way people are shopping for and buying cars is adapting. It is changing with the landscape of technology. Is the dealership? Better yet will the dealership?
In an interview with Car Business Today, Automotive Training Expert and Insider Grant Cardone said, "The idea that a dealer would require a fully armed customer to experience the same process as an uninformed one is costing you money and the customer a positive experience."
Managers and sales people need to train on how to handle, serve and market to the changing consumer or risk an even greater fate than lost revenue and CSI.
Cardone Training Technologies has brought Cardone On Demand to market with the intention of giving dealerships principles and solutions custom tailored to handle today's buyer. Additionally, Cardone On Demand does it in a way that is congruent with how sales people in the information age look for and get information. The average American sales person has never read one book on selling, yet watches 2-3 videos a day on YouTube. Cardone On Demand is a cloud based solutions center for management and sales people to find solutions to today's problems. It will isolate and handle the missed opportunity in the dealership by following a simple 3 tier system designed to add 15 - 30 units in the first month.
For more information on Cardone On Demand or to experience a 3 day complementary trial, please contact David Bradley, Sales & Marketing Manager for Cardone Training Technologies at firstname.lastname@example.org or 310-777-0352
Few Test Drives:
The average new car may cost $30,000, but 49% of buyers report only test-driving one vehicle (sometimes none) before finalizing the deal on their latest car, truck or SUV. Typically, auto buyers demo just 1.9 cars before buying, with right over one quarter (26%) test-driving 3 plus vehicles. 1 in 6 DID NOT test-drive the vehicle they bought and HALF test drove only 1.
Even For Used Cars:
You'd think that a used-car buyers at a dealership would take significantly more test-drives (considering each vehicle is unique), but the DMEa study reveals that is not the case: 30% of used buyers demoed 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,3 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 McKinsey4 that found that car buyers visit 1.6 dealerships before buying – plummeting from 5 just a decade ago. DMEa's survey reveals that used buyers make slightly more dealership visits (to search inventory) than new buyers do: 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.
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%).
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.