The auto industry has a major problem

87% of American adults dislike something about purchasing a vehicle at a traditional car dealership. 87% of Americans dislike something about shopping at a traditional car dealership. 56% of Millennials would even prefer cleaning their homes than dealing with a car salesperson. That trend continues based on the research I just sat in on.

A leading online auto review website writer asked me if I would like to listen to some market research on the “car buying experience.” The audience was over 200 people in different cities throughout the US and what I heard was a warning to the auto dealers. Here are some key findings:

1ne: With certain brands/models in short supply, consumers are being asked to pay MSRP or above, and they feel like they are being taken.

2wo: Customers are distraught at “market adjustments,” which add thousands to the price of a vehicle. The vast majority said they wouldn’t pay the additional fee and said it would leave them with a “negative” view of the dealer and brand.

3hree: Almost everyone said they hate the “negotiation” process and would prefer to buy a new vehicle online with a guaranteed price upfront.

4our: Having a service lounge with free Internet and beverages is not a reason to purchase one brand over another.

5ive: Some luxury car brands are changing how they sell vehicles to bottom-line pricing upfront and understand that customers hate buying new cars.

6ix: They spend extensive time online shopping for a new vehicle and usually have three or four choices. They read dealer reviews on Google and Yelp to help them decide which dealers (and brands) are not worth visiting.

7even: Cash buyers do NOT like to be pushed into financing, and if pressed too hard, they will leave.

8ight: Very few people said they were brand loyal because of pricing and poor dealer sales help.

Overall I could hear their frustration about the car buying process. This is another indication that the auto industry will have to change the way people buy cars. Maybe it’s a move to online or a takeover of dealerships, but some brands are in for a rude awakening when supply is available.

The auto industry has a major problem

About richmeyer

Rich is a passionate marketer who is able to quickly understand what turns a prospect into a customer. He challenges the status quo and always asks "what can we do better"? He knows how to take analytics and turn them into opportunities and he is a great communicator.

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