Understanding the Patterns and Challenges Changing Today’s Car Buyers’ Satisfaction Levels
There is little doubt that the effects of digitalization, economic difficulties, and industry pressures are being felt. You might be as surprised by the findings of the poll of over 10,000 car buyers as our research team was.
Not all the news is negative… To win and keep an auto shopper’s business in the upcoming year, our industry should reconsider its business and marketing strategies in light of the trending data and diminishing satisfaction levels.
In order to successfully overcome these challenges and shape auto consumers’ desires, requirements, and preferences for the future, let’s analyze some of the key insights on how economic and industry changes affected consumer happiness.
The findings of the yearly Car Buyer Journey Study
Over 10,000 people who would be interested in purchasing a vehicle in 2022 were polled for the study – ooh. The majority of the research was carried out in the second half of 2022, and dealers were also surveyed as part of the process.
Since 2009, SimpSocial has conducted an annual Car Buyer Journey Study to provide an in-depth analysis of the whole car purchasing process in the United States with a focus on customer satisfaction. The study’s objective is to give prospective purchasers of both new and used vehicles a comprehensive picture of the entire process, including the research, shopping, and several buying processes necessary to close the deal.
It was evident from this comprehensive viewpoint that industrial and economic issues were to blame for the decline in customer satisfaction.
It goes without saying that the automotive industry has had a particularly difficult couple of years. The majority of customers and our business began to recognize the chip scarcity as a serious issue at the end of Q1 2021. Gains in consumer satisfaction with the overall car-buying experience were severely hampered by the issues of low inventory and increased vehicle costs that would follow in 2022.
Consumer satisfaction scores have once more decreased and are now at pre-pandemic levels. Today, 61% of customers said they are extremely satisfied, despite the fact that customer satisfaction drastically declined for the second year in a row.
Only 31% of customers said they had a better experience buying a car recently than they had in the past. A decrease from 43% in 2020. At the same time, an increasing number of customers claim that the experience was or is negative. Many people blame the difficulty in obtaining adequate inventory and rising automobile prices for this deteriorating sentiment.
New Car – Percentage of buyers who were extremely pleased with their complete purchasing experience:
2022: 70% (down)
2021: 71%
2020: 74%
Used Car – Percentage of customers who were extremely pleased with their complete purchasing experience:
2022: 58% (down)
2021: 65%
2020: 71%
Pricing impacted the experience and happiness of car buyers.
Let’s look more closely at how price impacted all the many components of the consumer’s car-buying process and journey to better understand how pricing has contributed to the diminishing satisfaction scores from consumers and shoppers alike.
According to the report, in just the last two years alone, the average list price of both new and used cars increased by about $8,000.
In response to these price hikes, customers informed us that they had noticed greater prices than anticipated and had spent more money than they had planned. This subsequently affected the relationship between the buyer and their dealer or store because it made them feel worse about their deal. According to the poll, they expressed less faith in both their retailer and the bargain as a whole.
The decision to acquire an automobile was also influenced by macroeconomic circumstances.
Let’s now examine the macroeconomic aspects that also contributed to the altered purchasing behaviors and decisions as well as the satisfaction levels of automobile buyers.
Last year, inflation was a significant economic factor that had an impact on every US citizen, not only the auto industry. It was not just a blip on the radar. In fact, it was the highest it had been in forty years, according to records. Consumers claimed they were very conscious of inflation and that it had a direct impact on both the cost of their purchases and the value of their cars.
Interest Rates: As interest rates soared, buyers and sellers of automobiles faced significant financial obstacles. At the end of 2022, customers saw prime rates for used vehicles rise to above 10% in some circumstances, signaling the end of the days of 0% or cheap interest financing and significant financial incentives. Many sub-prime customers experienced rates twice that high and were priced out of the market because they could not afford the monthly auto payment under the lender-imposed debt-to-income ratio. The highest interest rates in the past 20 years were reached.
Gas prices: At an all-time high in many regions of the nation in 2022, gas prices primarily had an impact on the make and model of the car that potential buyers considered before deciding to buy. EVs and hybrids gained more and more traction, and OEMs moved forward with plans to introduce more electric and fuel-efficient car models in the upcoming year.
For auto buyers, the purchasing process grew less effective.
The length of time customers are spending in the buying process is by far the most notable difference in the car-buying process this year. And they didn’t like it at all.
The length of time it took a buyer to complete their purchase in 2021 was at an all-time low. Buyers today spend slightly under 15 hours studying and shopping for their next vehicle, which is almost an all-time high in time spent.
Why is that important? That’s two hours more than the previous year.
Buyers are also spending more time at the dealership, as shown in the chart above, which has led to a decline in customer satisfaction with the dealership experience. The biggest change is that purchasers are spending more time online investigating because there is less available.
The good news is that digital solutions improved the car-buying process, which is acknowledged by buyers, sellers, and dealers.
87% of car dealers say that using digital retailing solutions has improved at least one aspect of their company, saving time, increasing productivity, and boosting revenue, profits, and customer connections.
Most significantly, 81% of consumers in 2022 said
The overall shopping experience was improved through internet activities.
Customers claim that shopping online saves them time. They also claim that an eCommerce strategy offers greater pricing transparency and lets them deal with fewer dealership salespeople, which they perceive as a traditional pain point being removed.
“Mostly Digital” purchasers, or those who make more than
50% of the buying process is done online.
were the buyers who were happiest overall.
The findings showed that 67% of mostly digital purchasers and 49% of light digital customers, who complete less than 20% of the steps online, respectively, were happy with their purchasing experiences. Mostly Digital purchasers are likewise more likely to believe they received a good bargain from the dealership than Light Digital buyers. Additionally, they expressed greater satisfaction with how much time was spent at the dealership and during the buying process.
SimpSocial predicts that in the upcoming year, half of all vehicle purchasers will interact with at least one digital tool during the purchasing process, and eighty percent of consumers said they would be willing to conduct all of their business online within the following five years.
For the future’s path
Despite a decline in overall satisfaction with the car-buying process in 2022, you can overcome some of the obstacles caused by macroeconomic and industry issues by understanding what today’s car buyers want, need, and prefer. There is room for growth for the dealers in the upcoming year to lessen the arduousness of the procedure for in-market auto shoppers as long as buyers continue to demonstrate need and supply is growing.
You can not only attract a car shopper’s attention, but also win (or keep!) their business by paying closer attention to the experience you provide car buyers online and how that translates into in-person interactions, enhancing efficiency and transparency, and showcasing how your brand’s experience stands out as the one a consumer should choose.
SimpSocial offers you pre-qualified leads for automobile buyers. Both the data and the customers are available to us. We wish to match their needs with those of our dealer partners in order to generate high-quality leads and, on average, produce gross profits that are 35% greater. We electronically connect you with clients in order to attract them to you, allowing you to concentrate on developing and letting your brand stand out.
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