Rethinking the test drive to unlock new revenue

There’s no doubt COVID-19 accelerated automotive retailers’ digitization efforts. Evolving consumer preferences for personalized, on-demand service that doesn’t require a dealership visit mean the retail environment now covers a lot more ground.

However, the car buying experience is still very much that; an experience. The ability to experience a potential new vehicle; the performance and handling, the body lines, the in-car technology, that new car smell, all add considerable value to the ultimate purchase decision. So how can we rethink this journey in a way that considers these seemingly incongruent realities? 

It’s time to re-think the test-drive. And perhaps by doing so, we open the door to re-thinking the broader dealership experience. One that is more customer-centric and even more profitable. And just as importantly, only requires some relatively simple new ways of operating.  

Self-guided test drives 

More contact-free experiences, while adopted by dealers mostly in response to COVID, are here to stay. KMPG found that more than half of consumers prefer to take a test drive without visiting a dealership, and 75% of shoppers who intend to buy a car in the next year said they wanted to close the deal somewhere other than the dealership. Self-guided test drives provide an option for those wanting to reduce time at, or avoid the dealership all together. 

A self-guided test drive can be initiated at the dealership or through at-home delivery for higher-tier vehicles. In the dealership setting, customers can utilize the contactless contracting offerings that have been introduced over the past months to provide their license and credit card collateral, as well as sign any specific location agreements before picking up a key fob. At-home, they receive a delivery and execute their drive individually. Sales people can still offer “ride-along” product expertise by calling into the vehicle during the test drive itself or standing by for questions after. Self-guided test drives are a great way to add a physical, on-demand element to an online shopping experience.  

The extended test drive 

Taking this a step further, the ability for a shopper to experience a potential new vehicle as part of their daily routine can be even more impactful in closing a sale. While KPMG found that 83% of drivers would never buy a car without test driving it, JD Power research shows 98% of customers are more likely to purchase a vehicle after an extended test drive. 

This option not only is preferred by consumers, but it also offers dealerships an opportunity to derive some revenue from the added convenience.  Accenture found 47% of all consumers are willing to pay more if retailers exceed their expectations, and data from JD Power shows the “exceptional” experience of extended test drives is worth $50-$100 (or more) to more than half of consumers. If a consumer decides to purchase after the extended test-drive that rate can be credited to their final purchase price.  

Don’t leave money on the table 

Extended test drives aren’t the only experience that dealers can make transactional, while simultaneously offering a more thoughtful customer touchpoint. By re-thinking the way consumers view loaner vehicles, we can even leverage a scheduled service appointment as a potential catalyst for a new vehicle sale in the future. 

Studies found that 75% of customers view courtesy loaners as test drive opportunities and will pay up to $30 for a service loaner. For customers nearing the end of their lease or vehicle ownership cycle, offering an upgraded loaner for a small fee allows customers the convenience of a loaner vehicle, while also experiencing an upgraded version of the brand to consider.  

But what about risk? 

How can dealers offer modern experiences without increasing costs? Dealerships can better manage and protect their assets with simple digital tools. Connecting every vehicle on your lot via a single screen solution, to gain visibility into location and vehicle health, automate fuel and toll recovery, and seamlessly credential customers can go a long way in driving efficiency, cost savings and a better customer experience. Embracing the right technology means dealerships don’t need to decide between elevated experiences and profitability.  

Modern experiences for today’s buyer 

Making the car buying experience more approachable and in-line with today’s changing consumer behaviors can start with the test drive. Allowing more extended or self-guided test drives is a smart strategy to cater to the modern buyer by giving them more control over the remaining physical element in an increasingly digital experience. The best part? There’s a real revenue opportunity in a reimagined test drive offering.

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