Like many industries, the bricks & mortar market for car buying is increasingly being disrupted by online competition. Consumers are becoming more comfortable browsing the web to find the best deals, and many are sick of spending hours in a dealership completing their purchase. The user experience counts for a lot, so dealers want to avoid any bumps in the road. But insurance is a persistent headache, adding extra friction at the end of a process which may already have taken several hours. This negative impact on the end customer experience is something many dealers will want to avoid.
Fortunately, digital retail platforms are partnering with DMS providers to improve the purchase experience for consumers. Dynamically priced, relevant insurance offerings, delivered direct to the customer at point-of-sale, offer dealers an opportunity to drive profits and repeat custom.
Bumps in the road
The process of buying a car can be a long, drawn-out affair. From initial online research, to shortlisting, test-driving and finally completing the purchase it could take up to 12 weeks, according to one estimate. The final part of this arduous process can take as long as two hours, and that’s assuming all the financing is in place. The last thing the customer needs is to spend even more time on the phone to their insurer or browsing their mobile device looking for coverage deals.
This can take significant extra time and add unnecessary stress to the car buying experience. It rightly irks consumers that all the information they’ve just provided to their dealer — address, credit history, driving info, car type and so on — has to be re-entered by their insurer, who then repackages it all and sends it back to the dealer. It makes no sense.
One survey found that although 81% of car buyers were satisfied with the test-driving process, satisfaction levels plummeted to 67% once interactions with F&I were included and only 56% said they were satisfied with how long the process took.
They may not even be getting the best deal. Even if a consumer decides to try an insurance aggregation site before buying their vehicle, there’s no guarantee what they end up with will be the right package for their particular set of circumstances. The “box mentality” that suffuses the industry means most buyers are offered a generic, one-size-fits-all option. That’s not to mention the hassle of being bombarded with follow-up emails and phone calls from shortlisted online providers.
A new way of doing things
Dealers are missing a trick. Over half (53%) of consumers say they would buy more cars if the purchasing process were easier and 72% say they would visit dealerships more often if the buying process was improved. Yet few are focusing on the major roadblock that insurance currently represents.
The good news is that solutions exist today that could help them drive major improvements in the customer journey by integrating insurance into the in-dealership experience. Insurtech innovators offer machine learning-powered platforms that pick policies and bundles from multiple underwriters to offer each driver a customized solution. They’re also able to apply advanced data analytics to customer information — such as previous purchases and claims history —to create the best-priced, most relevant insurance products, thereby improving conversion rates.
Historical challenges around the claims experience are also being tackled thanks to next-generation insurtech innovation which offers: plain English policies, online submission of claims and real-time status updates, and AI-powered instant payments. Thanks to the power of API-led integration, such platforms can be offered via DMS in-store or incorporated seamlessly into a dealer’s online website. The online dealership market in the US alone was said to be worth $30bn in 2018.
Over half 54% of consumers say they would buy from a dealership that offers their preferred experience, even if it didn’t have the lowest price. Modern insurtech fits the bill by both shortening a frustratingly admin-heavy process and ensuring customers get the most relevant, best-priced cover. As such, it offers dealers an unmissable opportunity to streamline a much-neglected part of the purchasing process: improving customer loyalty and harnessing an additional revenue stream in the process.
It’s time to break free of the old ways of doing things and embrace digital alternatives to accelerate your business down the road to future success.
Learn more at Cover Genius.
Austin Ledgerwood is Head of Automotive Partnership for the Americas at Cover Genius, one of the fastest growing insurtechs globally. In his role, Austin is responsible for leading and executing the company’s automotive strategy and creating value for partners by delivering a seamless insurance experience for their customers.
Prior to his current role, Austin served as the Senior Director of Client Performance for Flexdrive. Leading the Client Performance team, Austin’s focus was to grow and develop partnerships with rideshare platforms and large automotive groups. Before joining Flexdrive, Austin was the Retail Advantage Director of Business Development for Cox Automotive, focused on client strategy, which includes client acquisition and client management. Austin has also served as the Director of Finance, Commercial and Major Dealer where he oversaw the credit and collection management of Cox Automotive's Commercial and Major Dealer portfolio. Prior to joining Cox Automotive in 2006, Austin held a leadership position at World Omni Financial, focused on inventory and floorplan management.