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New Research: 1 in 6 Car Buyers Skips Test-Drive; Nearly Half Visit Just One (Or No) Dealership Prior to Purchase

DMEautomotive study provides fresh evidence that dealership avoidance is a new car buying "normal"


News provided by

DMEautomotive

Apr 15, 2014, 08:30 ET

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DAYTONA BEACH, Fla., April 15, 2014 /PRNewswire/ -- It may be the second most expensive purchase of most people's lives, but new research from DMEautomotive (DMEa) reveals that a growing number of Americans are bypassing test-drives – and making strikingly few visits to dealerships – in their car-buying process.

The latest survey of roughly 2,000 automotive consumers1 found that, before purchasing, 16% took no test-drive, and 33% test-drove only one car. And more than two-thirds (68%) reported that they visited only two dealerships or fewer before buying - with 40% visiting only one dealer.

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Dealership avoidance: Half of Americans visit 1 dealership (or less) before buying a car. (PRNewsFoto/DMEautomotive) (PRNewsFoto/DMEAUTOMOTIVE)
Dealership avoidance: Half of Americans visit 1 dealership (or less) before buying a car. (PRNewsFoto/DMEautomotive) (PRNewsFoto/DMEAUTOMOTIVE)

The survey also measured consumer trust of dealer salespeople, and the results were sobering: only 21% claimed they perceive them as "trustworthy," a lower trust rating than reported for lawyers, mortgage brokers and insurance salespeople.

"This avoidance of physical dealerships is in stark contrast with how much online vehicle research is happening: 4 in 5 people now use the Internet for car buying, visiting 10 auto websites in the process,1" said Dr. Mary Sheridan, Manager of Research and Analytics at DMEa. "More people are stealthily comparison-shopping dealerships and inventory online, and then swooping in to buy when their minds are already made up. Dealerships can no longer rely on in-store visits and the old 'be-backs' to drive sales: they need to have the most powerful online presence wherever dealer/vehicle selection is happening, and work far harder to keep customers close throughout the ownership cycle, using every retention marketing tool possible, like a constant-connection mobile app."

KEY FINDINGS:

Few Test Drives: The average new vehicle may cost a record $32K+2, but roughly half (49%) of buyers report only test-driving one (or no) vehicle before purchasing their latest vehicle. On average, car buyers test-drive only 1.9 cars pre-purchase, with just over a quarter (26%) test-driving 3 vehicles or more.

Percent of consumers test driving vehicles
1 in 6 DID NOT test-drive latest vehicle purchased, half test-drove 1 or less

16%

33%

25%

14%

4%

3%

2%

3%

0

1

2

3

4

5

6

7 or more

Even For Used Cars: Conventional wisdom is that used-car buyers at dealerships take significantly more test-drives (as each vehicle is unique), but the DMEa study reveals that is not the case: 30% of used buyers test-drove only one vehicle (vs. 35% of new buyers) – and a greater percentage of used buyers (18%) than new (14%) reported taking no test-drives.

Young More Likely to Test-Drive – Women to Avoid: Car buyers under 35, who may be more enthralled with the newness of the car-purchasing experience, are slightly more likely to take test-drives and try out more vehicles. For instance, 57% of those under 35 test-drove more than one vehicle (vs. 48% of those over 35) – and 33% test-drove more than three (vs. 23% of those over 35). But women, who influence 85% of all car purchases,3 were bigger test-drive avoiders: 19% skipped it altogether, vs. 12% of men.

Few Dealerships Visited Pre-Purchase: The survey found that 68% of car buyers visit two dealerships or less – and only 15% visit four or more – before buying. Overall, car buyers only visit 2.2 dealerships. So, this new DMEa data confirms recent industry research like that from McKinsey4 that found that car buyers visit 1.6 dealerships before buying – plummeting from 5 just a decade ago.

DME­­­'s survey reveals that used buyers make slightly more dealership visits (to search inventory) than new buyers do: for instance, 38% of used buyers visit 3+ dealerships, vs. 28% of new. Overall, new buyers hit 2.1 dealerships on average, vs. 2.3 for used buyers.

Young Less Dealer-Averse; Women More Dealer-Averse: While all ages/genders report a low number of dealership visits, a bright spot for dealerships is that car buyers under 35 make slightly more visits than their older equivalents. Sixty-three percent of those under 35 visited two or more dealerships, vs. 53% of those over 35 - an indication that dealers should focus on delivering a modern retail experience, integrating the digital and mobile forms of shopping and purchase that millennials have come to expect.

Women, again, show more pronounced dealer avoidance: 46% of women visited zero or one dealerships to look at inventory, vs. 41% of men.

Car salesperson trust problem: Car buyers rated dealer salespeople on a "trust scale," and a dealer image problem persists: a significant majority (56%) rated car salespeople untrustworthy - another 22% reported they "neither trusted/distrusted them" – and only 1 in 5 placed them in the trustworthy column.

Perhaps surprisingly, nearly twice as many car buyers under 35 trust dealer salespeople (30%) than those over 35 (17%). But again, dealerships have a notable "woman problem": only 19% of women trust their salespeople, vs. 24% of men.

How Trust in Car Salespeople Stacks Up: The survey found that only 5% of consumers trust car salespeople more than doctors – 20% trust them more than lawyers - and 21% trust them more than either insurance salesmen or mortgage brokers. One small consolation: more people trust dealer salespeople than either politicians (57%) or telemarketers (59%).

About DMEautomotive
DMEautomotive (DMEa) is the industry leader in science-based, results-driven automotive marketing, and provides turnkey marketing to the largest and most innovative automotive organizations, from automobile dealerships to many of the largest aftermarket companies in the U.S. DMEa's uniquely panoramic view of the complete automotive sales and service market, combined with its cutting-edge, science-based marketing programs, increases customer yield, conversion and retention.

DMEa does not take marketing performance on faith, and each product and service is measured by a simple, precise scientific approach: Is it true? Prove it. Will it work? Test it. Does it generate results? Show it! Supported by DMEa's proprietary, cloud-based Red Rocket Technology Platform, the DMEa product suite includes science-based, data driven, multi-channel customer acquisition and retention marketing programs; best-in-class campaign reporting; data management and analytics; auto-focused Customer Interaction Center solutions, and complete on-site mail and email fulfillment services. Headquartered in Daytona Beach, Florida, DMEa also has major operations in Jacksonville, Florida.

1 J.D. Power & Associates "2013 New Autoshopper.com Study"
2 Kelly Blue Book data, 2013
3 NBC Universal survey, 2010
4 McKinsey report, 2/2014

Photo - http://photos.prnewswire.com/prnh/20140415/FL04181

SOURCE DMEautomotive

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