The process of buying a car is a little more complicated than simply walking onto the lot, pointing at a vehicle, and saying, "That one." For one, car prices fluctuate and savvy buyers will know when and how to negotiate. On top of that, the uptick in digital car-buying is bringing a whole new perspective to the marketplace.1
The COVID-19 pandemic also contributed to shifts in the industry, as logistics hurdles contributed to shortages on lots, driving prices up. In 2023, supply chain issues have likewise caused problems, while steep interest rates have further deterred buyers.2 Consumers are more judicious and careful with their choices than ever before.
Below, we break down the modern car sales process, revealing how consumers can leverage today's technology to close the deal. At each step, we also explain how this consumer behavior impacts auto dealerships, revealing how dealerships can ensure they're meeting consumers' needs, so everybody's happy.
4 Steps for Buying a Car in the Modern Marketplace
Car dealerships need to understand the average consumer's car-buying process if they're going to meet their target audience's needs. Here's what the state of car sales looks like today.
1. Become Knowledgeable
The consumer car-purchasing journey starts well before the dealership's first direct contact with the buyer. Modern car buyers use digital technology to help them shop, researching options via online review sites, blogs, social media, and more. They may look up and compare information like make, model, year, color, price, and mileage.
What does that mean for dealerships? Consumers are no longer relying exclusively on them for knowledge. Expect buyers to be well-informed. If there is a discrepancy in what you advertise as a car's mileage versus what a consumer has read online, they'll flag it. Your website and marketing materials need to be accurate and up-to-date, and your sales team must be well-informed.
2. Comparison Shopping
Once a consumer has the basic information they want about a car, they'll start shopping around. This involves asking for a quote. Again, this looks far different than it did in the past, as consumers are no longer limited to getting a quote only from the neighborhood dealership. They can search further to get estimates from various dealerships.
How can dealerships respond to the shift? It's critical to institute transparent pricing. Be clear about the car's base sticker price, plus the extra costs that add-ons will incur. Keep in mind that consumers may look up prices online first and then turn to the dealership to clarify those prices. Again, it's important that what's posted online matches what people see in the showroom.
3. Test Drive
The pandemic made a clear impact on how consumers test-drive their vehicles. During the pandemic, test drive home delivery became more prevalent. Some 22% of car buyers didn't test drive their automobile at the dealership directly. Of those surveyed, approximately 81% were satisfied with the process.3
The high satisfaction level suggests that a home test drive could still be relevant in post-pandemic times. During the pandemic, proactive dealer outreach proved useful, allowing auto sellers to directly connect with in-market consumers. Consumers liked the more efficient buying process that these shifts allowed for. To meet their needs, dealerships can continue to rely on digital tools to improve efficiency.
4. Negotiation and Purchase
More knowledgeable car buyers can afford to negotiate. They have done their research, comparison shopped, and learned about the market. With that in mind, there are a lot of factors for them to consider, from lower inventory levels to higher interest rates. Consumers may have stricter budgets and be more willing to walk away.
Car dealers can meet buyers where they need to be met by not rushing them, being transparent about information, and taking a comprehensive approach to costs. When buyers are ready to sign on the dotted line, make it as easy for them as possible. Clarify what information is needed, like lender pre-approval letters, proof of insurance, and valid identification.
ACV Max: Bringing Together Modern Car Buyers & Dealerships
The process of buying a car has evolved since the pandemic. As digital technologies gain a further foothold in the car market, the car sales process is likely to keep changing. Understanding the new rules of car buying helps consumers and auto dealerships alike. Consumers can learn how to leverage the new digital tools at their disposal, while dealers can understand how to best meet consumers' shifting needs.
Car dealerships ready to step into the modern age can benefit from ACV Max's solutions, like the Inventory Management Platform and ACV Max Showroom. These tools let dealerships keep their information up-to-date, provide price transparency, and showcase their products optimally.
Find out how MAX can help your dealership win over today’s digital customers.
Sources
- Consumers Embrace Online Car Buying. Progressive. Retrieved November 30, 2023, from https://www.progressive.com/resources/insights/online-car-buying-trends/
- Betterton, R. (January 26, 2023). How the car buying process has changed in 2023. Bankrate. Retrieved November 30, 2023, from https://www.bankrate.com/loans/auto-loans/how-the-car-buying-process-has-changed
- Schirmer, M. and Hailes, D. (February 23, 2021). Cox Automotive Study Finds Car Buying Process Improved During COVID-19 Pandemic. Cox Automotive. Retrieved November 30, 2023, from https://www.coxautoinc.com/news/cox-automotive-study-finds-car-buying-process-improved-during-covid-19-pandemic/
