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The pandemic may have changed car-buying as we know it

A report suggests that the steps dealers took to survive were popular with consumers

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Photo (c) JGI Jamie Grill - Getty Images
The economy was preparing to shut down a year ago as coronavirus (COVID-19) cases surged in the U.S. One industry bracing itself for the worst was the auto industry.

But a year later, it’s clear that the worst-case scenario never occurred, and the industry has spent the last few months trying to keep up with demand. In a report, Cox Automotive found the changes initiated by dealers last year proved highly popular with consumers and are likely here to stay.

Amid shelter-in-place orders, car dealerships were closed to the public. Sales cratered at first, but dealers quickly adapted to allow buyers to shop for a vehicle, negotiate terms, and even schedule a test drive all online.

What’s more, some national used car dealers already had that model in place. The study found what it called a sharp rise in the usage of “New Form Online Retailers,” which include used-vehicle-only sales sites like Carvana and Vroom

According to the study, approximately 17 percent of car buyers visited a New Form Online Retailer during their buying process, a significant increase from 11 percent in 2019 and only 7 percent in 2018. 

These retailers allow consumers to shop for a car online and then deliver it to their homes. If there is a trade-in, they take it away when they deliver the purchase. Many consumers who had never tried this before found that they liked it.

Growing role of the internet

Cox Automotives’ Car Buying Journey (CBJ) Study shows that online shopping continues to be a central activity in the car buyer’s journey. In fact, many consumers have long used the internet to research purchase options. Third-party automotive websites are still the number one destination for vehicle shoppers as they enter the process, with up to 79 percent of buyers indicating that they used a third-party site in 2020.

At the same time, the number of dealerships visited and the amount of time spent in them dropped in 2020, but sales held relatively steady. The Cox researchers attribute that to how traditional car dealers adapted to the new realities.

One of the most important steps taken in response to COVID-19 was dealers’ willingness to bring a car to the shopper’s home for a test drive. An estimated 22 percent of buyers said they did not go to a dealer to test drive the vehicle they purchased.

However, of the buyers who took a test drive, approximately 81 percent said they were satisfied with the process, the highest satisfaction rating for any step.

Efficiency led to increased satisfaction

According to the CBJ Study, consumer satisfaction with the car-buying process rose as more dealers used the internet to promote efficiency. “Heavy Digital” buyers – consumers who performed more than half the steps online – were more satisfied with the process than buyers who didn’t use the internet.

“The Cox Automotive Car Buyer Journey Study: Pandemic Edition shows that vehicle buyers in 2020 were more decisive about their purchase, spent less time on the process, and were more satisfied than ever,” said Vanessa Ton, senior manager of Industry Intelligence at Cox Automotive.  

With this level of success during a pandemic that severely limited consumer activity, the researchers say car dealers are likely to keep these new procedures in place, at least for the foreseeable future.

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