According to ease of purchase research conducted by CDK Global, 85% of last month’s car buyers felt the process was easy, the highest score since last July, and 3% higher than in January. Dave Thomas is the Director of Content Marketing and an Automotive Industry Analyst at CDK Global. On this episode of Inside Automotive, Thomas joins host Jim Fitzpatrick to discuss key takeaways from the study and provide insight on how the car buying journey has become easier.
Better supply
Thomas notes that 86% of surveyed customers completed their purchase with ease in February, the highest number since last July. Thomas attributes this to the steady recovery of OEM production. Although inventory levels were still sub-optimal, new vehicle supply increased 68% year-over-year. With more cars on lots, customers have been able to find their preferred model faster than they have in nearly a year. The impact which manufacturing has had on the car buying experience is also evident in the data, which shows that the number of customers who only needed to visit one storefront to find a compatible vehicle grew 16% in one month, hitting 44% by the end of February.
Time spent
CDK’s ease of purchase research also found that customers are spending less time at the dealership. While the number of hours buyers spent both online and in-store increased throughout 2022, the average duration of store visits has declined substantially thanks to retailer efforts to improve ease and efficiency. The percentage of frustrated shoppers who felt the process was too time consuming dropped from 42% to 34% in February.
Purchase method
Last month’s preferred purchase method also swung in favor of retailers. While over half of all new vehicle sales in January were made for cars on factory lots or in transit, 52% of customers bought from dealers in February. This number is also the highest since CDK began collecting ease of purchase data last summer, and moderately resembles the market before the COVID pandemic. The numbers also indicate that, while the buying process tends to start online, customers still overwhelmingly prefer to complete their purchase in-store rather than through store websites. Only 3% of February’s sales came from digital retail.
Price negotiations
Price negotiations continue to be one of the most unpleasant steps in the car buying process for both dealers and buyers. Nevertheless, Thomas notes that certain aspects are starting to change for the better. Customers overwhelmingly support completing negotiations online first, a capability which dealers are offering in increasing numbers. Meanwhile, of those who completed price discussions in-store during February, 61% completed the process with ease. While room for improvement still remains, these statistics indicate that retailers are taking measures to make these conversations less stressful.
