Study debunks myths Rowe says

Study debunks myths, Rowe says.

Study: Some Shoppers Like Car Dealership Drill, But Not Many

“Consumers are telling us that we as an industry are not moving fast enough,” says AutoTrader President Jared Rowe. 

NEW YORK – Of 4,002 people polled for a car-shopping study, only 17 say they like the current buying process at dealerships.

The rest want changes, according to Autotrader’s “Car Buyer of the Future Study.” The survey seems to dispel a few myths, too.

Changes sought by survey participants include the way test drives are conducted (people like them but not when accompanied by a heavy sales pitch), and how long it takes to complete financing paperwork at the store (respondents want to do more of it online).

“While there is good work going on right now to adapt to decades-old sales processes, consumers are telling us that we as an industry are not moving fast enough,” says Autotrader President Jared Rowe, who grew up in a dealership family.

He says the study debunks three myths:

  • Salespeople will be less important in the future.

But study results indicate the dealership and its salespeople will continue to play an important role in the buying process. Eighty-four percent of study participants say they want to buy a car in person.

At the dealership, they want to confirm information they found online and learn about the likes of specials, offers, warranty and service.

“It’s an important decision,” Rowe says.  “They are coming to the dealership to validate what they learned online.”

  • Consumers don’t want to negotiate.

But the study says 56% do. Moreover, two influential groups of car buyers, Millennials and females, prefer negotiating over flat-rate pricing. “That’s counterintuitive,” Rowe says. “You’d think Millennials and females would want to negotiate less.”  

Dealers who successfully run no-negotiation stores have worked at it for a long time, building a reputation that they’re offering a square deal, Rowe says during a presentation of study findings at an event held in conjunction with the New York International Auto Show.

“Most consumers feel they must negotiate to get a fair price,” he says, noting even so-called no-haggle stores negotiate trade-in values and financing.

  • Lowest price always wins.

While important to consumers, lowest price can be trumped by the dealership experience: 54% say they would buy from a dealership that offered their preferred experience over a rock-bottom deal.

Nearly 75% say they would drive farther to deal with a great salesperson. That compares with 65% who are willing to drive to get the lowest price.

Here’s where Rowe says changes are needed:

  • Test Drives. While 88% say they will not buy a car without test-driving it first, the majority dislike the sales pitches that often go with the demo drive. “There is a difference during a test drive between a salesperson talking about the product and talking about the sale, as in ‘Would you buy the car today if…,’” Rowe says. “The industry has traditionally viewed the test drive as a step in the selling process. But today, with consumers doing so much research online, there is a greater need to validate the product, rather than directly sell it, on a test drive."
  • Deal Structuring. Of those who like the idea of online deal building, over half want the ability to start the negotiation on their own terms, preferably online. Forty-five percent want to remain anonymous until they lock in the deal structure.
  • Financing Paperwork. Nearly three-fourths of consumers want to complete the credit application and financing paperwork online. They say they want to do that to save time at the dealership and to reduce pressure while filling out the forms.
  • Service. More than 80% of consumers indicate they would like a system that gives them access to a network of local service centers that honor service agreements. It centers on convenience.

The 2015 Autotrader Car Buyer of the Future study was done in phases and included interviews, ethnographies and focus groups.

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