The time is ripe for a revolution in car-buying. It’s been fifteen years or so since third-party shopping websites came on the scene, and sites like Edmunds and AutoTrader started publishing invoice and retail pricing information for all to see. This was a huge shift in our industry. Because the dealer no longer held all the information, the consumer’s shopping experience was hugely changed. However, despite all the promises of a “car-buying revolution,” the truth was that once consumers entered the showroom, they were still put through a tiring and painfully long buying process.
In fact, numerous recent studies show that going to a dealership to buy a car can still take up to four hours – far too long in a world where consumers expect immediate gratification. The frustrating disconnect between the online car-buying experience and the in-store experience is turning consumers away from visiting dealerships altogether. A McKinsey study found that today’s car buyers visit just 1.6 dealerships before buying, compared to five just a decade ago.
Interestingly, it’s not just consumers who feel there is a need for change. A recent survey showed that eight in ten dealers think the current car buying process is too long, and the ideal process should take two hours or less. And, because time is money and time correlates directly to a positive or negative customer experience, it is generally recognized that a more streamlined car-selling process could maximize dealers’ profit potential and reduce risk to customer satisfaction.
The same survey revealed that dealers agree that the negotiation and time spent in F&I are steps in the process that consumers like least and, not surprisingly, represent the biggest opportunities for improvement. Forty-four percent of dealers surveyed felt that capturing more detailed information about the customer earlier was the biggest opportunity to streamline the purchase process.
So why not think differently and create a more connected buying experience by moving financing to the front of the car buying process – either online, or in store prior to the test drive? One answer is that many dealerships are reluctant to share payment terms online and can be hesitant about changing their long-standing processes. But shouldn’t dealers want to give consumers a seamless shopping experience from start to finish? And because most consumers are doing their shopping and making their decision to buy a vehicle online, it’s logical to start the process there.
Why not integrate actual credit approvals with exact near-final payment terms from the dealers preferred lender programs – all controlled by the dealer – before the customer steps into the showroom? With no credit application to complete and no lender decision to wait on, the customer is transitioned from the test drive to the negotiation, to F&I much quicker. The customer’s perception of time improves, penetration of profitable aftermarket products and services increases, and CSI soars.
I believe this is the way dealers will begin converting all their online shoppers into in-store buyers. It’s a win-win. Consumers are more satisfied because they desire a streamlined, integrated sales process where they are engaged and empowered in the process. Dealers win when their customers are allowed to start the buying process online, which accelerates the sales process, improves profitability and increases customer satisfaction.