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Jan 18, 2023, 15:00 ET
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ATLANTA, Jan. 18, 2023 /PRNewswire/ — New research released today by Cox Automotive shows that satisfaction with the car buying process declined in 2022 for the second straight year. The 2022 Car Buyer Journey Study reveals vehicle buyers were frustrated with high prices, limited availability, and the amount of time required to complete the process. Used-vehicle buyers, who are often more price sensitive and face higher interest rates, were particularly unsatisfied with the experience in 2022, the research indicates.
Since 2009, Cox Automotive’s annual Car Buyer Journey Study has offered a comprehensive look at the overall vehicle buying process in the United States, with an eye toward consumer satisfaction. The study provides a holistic view – the journey through researching, shopping and the many purchase steps required to complete the deal – for both new- and used-vehicle buyers, and also includes research among dealership staff and management.
Research released today by Cox Automotive shows that satisfaction with the car buying process declined again in 2022.
“With the annual NADA convention opening in Dallas later this month and bringing together auto dealers from across the country, we think it is more important than ever to showcase the current state of vehicle buying in America,” said Isabelle Helms, vice president of Research and Market Intelligence at Cox Automotive. “While buying a vehicle is a complicated transaction, with financing required, trade-in valuations to consider and plenty of research required, it does not have to be frustrating for the consumer. With the right digital tools and systems in place, car buying can be a highly satisfying activity, and as efficient and streamlined as consumers want it to be.”
The 2022 Car Buyer Journey Study was created from surveying more than 10,000 consumers who were in the market for a vehicle in 2022 – 4,150 vehicle shoppers and 6,118 vehicle buyers. As part of the process, dealers were also surveyed. Most of the research was conducted during the second half of 2022.
1. Overall satisfaction with the car buying journey declined in 2022.
According to Cox Automotive research, 61% of vehicle buyers in 2022 were highly satisfied with the process, down from 66% the year earlier and well below the peak of 72% in 2020. Results in 2022 were generally in line with pre-pandemic levels. Satisfaction for new-vehicle buyers declined only modestly to 70%, down from 71% in 2021, while satisfaction among used-vehicle buyers fell significantly. In 2021, 65% of used-vehicle buyers noted they were highly satisfied with the process. In 2022, the percentage dropped to 58%.
Three elements impacted overall car buying satisfaction: time spent, limited inventory and high prices.
2. Vehicle ordering increased significantly in 2022, and buyers who pre-ordered were generally more satisfied with the overall experience.
Due mostly to new-vehicle inventory shortages, vehicle buyers were far more likely to have pre-ordered last year. Nearly 1 in 5 new vehicle sales last year was a pre-ordered vehicle, an 89% increase year over year. More dealers offered this solution, and 74% of consumers who pre-ordered indicated they chose that route to get the key features they wanted and exclude those they didn’t.
Further, most consumers (79%) who ordered vehicles were generally more satisfied with the experience, compared to a previous experience of buying off the lot. They also indicated they would likely pre-order again when returning to the market. Among buyers who pre-ordered vehicles, overall satisfaction was higher among those who ordered directly from the automaker, as opposed to ordering through a dealership. The research indicates that those who ordered from the automaker had shorter waiting periods, with better vehicle tracking and overall engagement through the process.
3. More buyers selected F&I products with their purchases in 2022 and leaned into lenders they trust.
Last year, 67% of vehicle buyers indicated they purchased an F&I product, up from 59% in 2021. More products were purchased as well, an average of 1.6, an increase from 1.3 products the year earlier. Shoppers continue to choose products such as extended warranties, GAP insurance to help protect auto loans, and wheel & tire protection plans.
With auto loan rates rising in 2022, the top reason for selecting a lender was predictably tied to the loan rate offered. Notably, though, was a growing importance of ‘trust in the lender’ and general familiarity with the lender. This was particularly true among Gen Z buyers and ‘Mostly Digital’ buyers. In fact, in 2022, trust in the lender was more important than an easy loan application process.
When it comes to securing financing, many buyers indicate they desire more online activity. However, while 55% of buyers checked their credit scores online, only 36% calculated monthly payments online; 30% applied for credit online, and fewer still, only 12%, signed paperwork online last year. This is seen by the Cox Automotive analysts as an opportunity for dealers and consumers, as more online F&I activity improves satisfaction and streamlines the experience.
4. EV buyers see digital retailing and eCommerce as a way to save time, while buyers choosing traditional powertrains feel it is the avenue to achieve the best deal and reduce buying pressure.
For EV buyers, online is the preferred route. The latest research indicates that 87% of EV buyers are open to the idea of buying fully online – a true eCommerce solution – while only 73% of buyers of new, traditional, internal combustion engine (ICE) vehicles are open to fully eCommerce solutions.
Looking forward, 80% of EV buyers indicate their next purchase will be a mostly online process, compared to 61% of new ICE buyers. New ICE buyers see eCommerce solutions as an avenue to reduce buying pressure and achieve the best deal while spending less time at the dealership. EV buyers, who on average are younger and more tech-savvy, feel digital solutions can save time and make the process easier and more convenient.
5. Shoppers, buyers and dealers agree: Digital solutions make the car buying journey better.
Nearly all auto dealers – 87% – indicate that digital retailing solutions have positively impacted at least one area of their business, reducing time spent, improving efficiency, and also benefitting sales, profits, and relationships with customers.
Importantly, 81% of shoppers in 2022 noted that online activities improve the overall buying experience. Transacting online saves time, according to buyers, and 78% of buyers believe an eCommerce approach provides greater transparency around pricing, and 86% say it allows them to interact with fewer dealership sales personnel.
‘Mostly Digital’ buyers – those who complete more than 50% of the purchase process steps online – were the most satisfied among all buyers. The research indicates that 67% of Mostly Digital buyers were satisfied with the buying experience compared to 49% of Light Digital buyers, who perform less than 20% of the steps online. Mostly Digital buyers are also more likely than Light Digital buyers to feel the dealership gave them a good deal. They were also more satisfied with the amount of time spent during the buying process and at the dealership.
In the year ahead, Cox Automotive forecasts that half of all vehicle buyers will engage with at least one digital tool during the purchase process.
For more information about the 2022 Car Buyer Journey Study and to learn more about how Cox Automotive is working transform the way consumers and dealers interact during the retail process – including the launch of Retail360, an industry-first solution that will help make retail transactions faster, more personalized, more accurate and more efficient for everyone involved – visit the Cox Automotive Newsroom or contact a member of the Cox Automotive PR team.
Cox Automotive is the world’s largest automotive services and technology provider. Fueled by the largest breadth of first-party data fed by 2.3 billion online interactions a year, Cox Automotive tailors leading solutions for car shoppers, automakers, dealers, retailers, lenders and fleet owners. The company has 25,000+ employees on five continents and a family of trusted brands that includes Autotrader®, Dealertrack®, Kelley Blue Book®, Manheim®, NextGear Capital™ and vAuto®. Cox Automotive is a subsidiary of Cox Enterprises Inc., a privately-owned, Atlanta-based company with $21 billion in revenue. Visit coxautoinc.com or connect via @CoxAutomotive on Twitter, CoxAutoInc on Facebook or Cox-Automotive-Inc on LinkedIn.
SOURCE Cox Automotive
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