If you bought a car in 2022 and weren't satisfied with the car buying process you weren't alone. According to Cox Automotive, satisfaction in the car buying process dropped last year for the second year in a row, after peaking in 2020. The reasons? Not all that surprising. The 2022 Car Buyer Journey Study cites high prices, limited inventory and the amount of time required to complete the process as reasons for buyer frustration. Researchers also say used-vehicle buyers, who are often more price sensitive and face higher interest rates, were particularly unsatisfied with the experience in 2022.
Cox Automotive's Car Buyer Journey Study, around since 2009, looks at the overall vehicle buying process in the U.S., with an eye toward consumer satisfaction. The journey includes research, shopping and the steps it takes to complete the deal, for both new- and used-vehicle buyers. It also includes research among dealership staff and management.
This year's study is based on a survey of 10,000 consumers who were in the market for a vehicle in 2022 – 4,150 vehicle shoppers and 6,118 vehicle buyers. Dealers were also surveyed and most of the research was conducted during the second half of 2022.
Here are the key takeaways as provided in a Cox Automotive Press release.
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.
- Source: Cox Automotive/PR Newswire.