Why car-buying experience pushes customers over the edge at many dealerships

Photo: wisecarshopper.com

Photo: wisecarshopper.com

Let dealers beware.

Car shoppers have a tipping point, and you may be close to pushing them over the edge.

“One of the most critical aspects of the dealership experience is the time consumers spend in store to complete a sale,” according to AutoTrader, the online shopping, selling and research website.

“Customer satisfaction is highest within the first 90 minutes at the dealership,” Cox Automotive reported in a white paper “It’s About Time: Streamlining In-Store Processes to Improve the Customer Experience” recently released by AutoTrader. “However, as the amount of time a customer spends at the dealership increases, customer satisfaction with that dealer is likely to decrease.”

Going beyond 2.5 hours steadily increases a customer’s dissatisfaction with the dealership.

“While some dealers are making strides in connecting the issues that contribute to purchase-day delays, there is still a lot of work that needs to be done – on our side as a partner and technology provider and in-store at dealerships,” said Jared Rowe, president of AutoTrader.com.

This is no small matter when 55 percent of new car buyers and 57 percent of used car buyers experienced frustration during the purchase process, according to a separate study by IHS Automotive.

The top five car buyer frustrations, according to the IHS study, are:

  • The amount of time it took to complete the purchase (41 percent)
  • Negotiating a purchase price (37 percent)
  • Getting a good trade in offer (24 percent)
  • Dealing with salespeople (19 percent)
  • Applying for/understanding financing options (18 percent)

“To better understand the disconnect between customer expectations and the dealership experience, Cox Automotive conducted an in-depth analysis of four distinct dealerships to actual cycle times across key processes from post-vehicle selection to pre-delivery of vehicle,” AutoTrader reported.

Unfortunately, none of the dealerships consistently meets its desired customer cycle time of 90 minutes, regardless of their geographic, demographic, and strategic and tactical differences, the Cox study showed. In fact, their actual average time, which included vehicle sales after the customer made his or her choice, trade-in vehicle appraisals and F&I, ranged from 115 minutes to 184 minutes.

The dealer that came closest to meeting the 90-minute timeline was a “volume-based commission dealership” in the northern Midwest near a population of over three million. The dealership with the longest average timeline was a “traditional franchise dealership” located near a southeastern U.S. city with a population of over four million. Cox also looked at a “forward-thinking dealership” in the Northwest near an urban area with a population of more than 600,000 and a “lean dealership” augmented by a used-vehicle wholesale business in a midwestern city with a population over 800,000.

In our next post, we’ll look at leading dealership best practices to help you get from here to there.

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