Despite a strange market, customers say buying a car is easier
Vehicle inventories are down. Prices are on the rise. It’s a seller’s market. Yet 82% of respondents to a CDK Global survey described buying a car as relatively easy.
“It surprised me,” Peter Kahn, senior director of research, CDK Global, tells Wards.
The company’s new “Ease of Buying Scorecard” takes a monthly look at consumer attitudes toward vehicle buying.
The report, launched in August, is compiled from responses received from more than 1,000 U.S. consumers surveyed on topics including vehicle availability, how easy it was to find prime vehicles and whether the buying process took longer. or less than expected.
Buyers are struggling to find a vehicle of choice as shortages of parts — particularly semiconductor microchips — have curtailed auto production, which has reduced dealer inventories.
Conventional wisdom might indicate that the shortage of inventory is making it difficult for car buyers. But only 12% of those surveyed in September described the buying process as difficult.
How is it possible?
Kahn (photo, left) credits consumer ingenuity to some extent. He notes that many buyers are turning to other means of sourcing vehicles, such as factory ordering and buying vehicles in transit that are not yet at the dealership. These two alternatives are up 10% and 8% respectively from August, reports CDK Global.
“Interestingly enough, buyers are getting used to a new world,” Kahn said.
Demand exceeding supply puts consumers in a weak position to negotiate car prices. Sometimes there is no negotiation. Some consumers pay more than MSRP for the vehicles they want, a rare transaction.
But whatever sticker remains seems acceptable to most customers. The results include 58% of respondents who found negotiating easy. Only 15% described it as difficult. The remaining 27% had no opinion on the matter.
Similarly, when it comes to agreeing on a trade-in value – often cited in previous surveys as a customer issue – 53% of respondents say it was easy, 27% were neutral and 10% said that was difficult. The rest of the interviewees did not trade.
The increased use of third-party trade-in ratings in recent years is often credited with eliminating or at least narrowing the differences between what customers and dealers think a trade-in is worth.
Kahn cites another factor that can lubricate the rails of the trade-in transaction: “Dealers are paying pretty high prices for trade-ins right now. That’s often more money than the customer expected.”
The time it takes to purchase a vehicle is another recurring pain point often seen in customer satisfaction surveys.
This period remains a problem, according to CDK polls. Forty-five percent of respondents say it took longer than expected, 40% say the time was as expected, and 16% say it took less time than expected.
Kahn says a previous survey indicates that the time customers perceive they spend at a dealership is more than dealerships perceive.
Digital Retail Now Plays a Big Role in Automotive Shopping “Dealers have really embraced digital,” Kahn says. “More and more of them are looking for the best way to take advantage of it.”
Yet professional in-store salespeople who demonstrate strong product knowledge and value customers’ time remain indispensable.
“A good car salesperson answers customer questions thoroughly and builds trust,” Kahn said. “It’s become more of a customer experience job.”