J.D. Power Study: Car Shoppers Aren't Happy About Higher Prices

Car prices are way up. And as you'd probably suspect, car shoppers aren't happy about it.  Higher vehicle prices driven by lack of inventory are driving customer satisfaction with the vehicle purchase down for the first time in more than ten years, according to the new J.D. Power 2022 U.S. Sales Satisfaction Index (SSI) Study. It shows that overall sales satisfaction has dipped to 786 (on a 1,000-point scale) from 789 in 2021. Alfa Romeo and Buick rank highest among brands in their respective segments.

Car shoppers felt a bit better about things in 2021 than they do this year.  Researchers say that's because even though car prices were higher in 2021 too, trade-in values were higher then expected, and consumer were happy about that.  But this year, many shoppers are finding higher MSRP's due to low inventory.  J.D. Power researchers say the satisfaction index score for fairness of price paid declines year over year, while metrics for the variety of physical and online inventory plummeted in each of the past three years.

"Even in the face of a continuing shortage of new-vehicle inventory and general inflationary pressure, dealerships have been able to maintain a consistent level of sales satisfaction," said Chris Sutton, vice president of automotive retail at J.D. Power. "With the supply chain being an ongoing issue and with no near-term solution, dealerships have had to use additional tools at their disposal, such as special orders and more personal customer handling, to maintain sales satisfaction. However, when dealers charge more than MSRP, particularly with long-term loyal customers, they risk a potential long-term negative effect on customer advocacy and service business."

EV vs Gas-Powered

Electric vehicle buyers seem to be the most unhappy with the sales experience compared to gas-powered vehicle buyers.   This goes for either premium and mass market segments. For example, satisfaction among owners of mass market battery electric vehicles (BEVs) is 56 points lower than among owners of gas-powered vehicles (791 vs. 847, respectively) and satisfaction among owners of premium BEVs is 33 points lower than among owners of gas-powered vehicles (831 vs. 864, respectively).

"If EVs are going to be the wave of the future, rapid improvements need to be made to close the gaps in factors such as product knowledge and vehicle delivery," Sutton said. "There is no doubt that the products are coming, but from a customer purchase experience standpoint, the dealerships are just not there yet." 

Following are key findings of the 2022 study, as outlined in a J.D. Power press release:

• Sticker price a demarcation point for new-vehicle buyers:  J.D. Power says although inventory shortages have prompted many dealers to charge more than the suggested price for new vehicles, the practice has had a negative effect on overall satisfaction. Satisfaction among buyers who paid more than sticker price is 757, while satisfaction among those who paid sticker price is 850. Among buyers of mass market vehicles, 25% paid more than MSRP compared with just 19% among buyers of premium vehicles.
• Special orders may be special solution to sales satisfaction: Satisfaction is higher among buyers who special ordered a vehicle for later delivery (854) than among those who bought a vehicle from the dealer’s lot (841). Additionally, dealer communication of vehicle status during the ordering and build process helps drive real differentiation in customer experience.
• EV buyers could use some show and tell:  J.D. Power reports that more than one-third (38%) of EV buyers failed to get instruction on EV charging before they left the dealership, which notably affects satisfaction. Satisfaction is 872 among buyers of premium EVs who received a demonstration but drops to 709 when there wasn’t a demonstration. Among buyers of mass market EVs, satisfaction is 835, and declines to 717 when there wasn’t a demonstration. “Explaining how to charge the vehicle should be a mandatory part of every EV delivery,” Sutton said. “Salespeople don’t need to show gas-powered vehicle buyers how to fill their tank, but they do need to show EV buyers how to charge their vehicle.”
•  Fewer dealership visits as buyers become more satisfied with online car buying: J.D. Powers further concludes that dealership visits are less important due to the lack of inventory and that buyers are getting more and more comfortable with buying a car online. This year, 85% of buyers say they visited a dealership during the purchase process, down from 88% in 2021. At the same time, many online activities have increased. For instance, 18% of buyers who visited the website of their selling brand or dealer say they completed the purchase paperwork online, up from 13% a year ago. Also notable is that 18% of buyers say they agreed to a final purchase price online, up from 15% in 2021.

Study Rankings

Premium Brands

1. Alfa Romeo (833) 
2. Porsche (831) 
3. Lexus - (819) 

Mass Market Brands

1. Buick (825)
2. Dodge (816)
3. Subaru (804) 

To see a complete brand ranking list,  click here.

About the Study

The U.S. Sales Satisfaction Index (SSI) Study is now in its 37th year.  It measures satisfaction with the sales experience among new-vehicle buyers and rejecters (those who shop a dealership and purchase elsewhere). Buyer satisfaction is based on six factors (in order of importance):

• delivery process (26%)
• dealer personnel (24%)
• working out the deal (19%)
• paperwork completion (18%)
• dealership facility (10%)
• and dealership website (4%)

Rejecter satisfaction is based on five factors: salesperson (40%); price (23%); facility (14%); variety of inventory (11%); and negotiation (11%).

The 2022 U.S. Sales Satisfaction Index (SSI) Study is based on responses from 36,879 buyers who purchased or leased their new vehicle from March through May 2022. The study was fielded from July through September 2022.

Photo Credit:  FGC/Shutterstock.com.