“What price would nice people put you in for a used car today?” Cartoon used car deals faded last year with the used car shortage pandemic and subsequent price hikes, elevating the online buying experience as the big difference to used car sales today.
at recent days Blog postCars.com noted that an analysis of its dealerships showed average used car prices started rising in January 2021 as new car production slowed, reaching a “peak of about $25,500 in February 2022. Since then, prices have remained high compared to In previous years. But we’ve seen a slight decline in recent months: the average price for all models in use was about $24,000 in July.”
Compare that to the July 2019 average of $17,500, and it puts average used car prices nearly 40% higher in 2022 than they were in 2019. With the price dealers don’t use to turn onlookers into owners, the online buying experience has become persuasive to more consumers.
We examined this in “The Key to Satisfying Car Buyers Is Digital Payments,” PYMNTS and on being Collaboration, part of the “Expanding Payment Options” report series with Onbe. He notes, “Digital transformation has taken auto customers out of the showroom, forcing dealers and auto companies to develop better digital solutions from start to finish. It goes beyond selling, and companies that can maintain customer relationships digitally have an advantage.”
According to this report, 72% of customer interactions on vehicles now take place via digital means, and 78% of used car buyers surveyed said they were extremely satisfied with the process.
Perhaps most importantly, price — the traditional reason buyers are drawn to used vehicles in the first place — is now an incentive for just 21% of used-car buyers, according to the report.
“Twenty-five percent of consumers said their primary reason for buying online is the ability to find the vehicle they want, while 21 percent said that was a price,” the report said, noting that “a positive online buying experience appears to help with Attract shoppers again, with 62% of online buyers saying they’ve bought a car online before.”
Add to these loyalty programs that run the entire chain from GM to Tesla, which in GM’s case is a points system that builds a balance that can be used on future car purchases. According to the report, Julie Hazel, director of GM Rewards and GM Card, said the company recognizes the importance of a positive rewards experience in continuing to increase customer loyalty.
See also: New car sales up 9%; Used car sales fell 17% year-on-year in August
Transforming demos driving car sales strategies
The change from brisk cruising and kicking tires to browsing Amazon-style car-buying sites isn’t unwelcome by consumers, and they are known to be wary of dealing with slick auto salespeople in person.
As found by “The Key to Car Buyer Satisfaction is Digital Payments,” smaller demos are the growing force in car buying today, and companies that cater to the preferences of these digitally savvy consumers are reaping the benefits at a time when large purchases like cars are being put off.
Research found that 68% of consumers under the age of 30 plan to buy or rent a car in the next 18 months, adding that “these buyers increasingly want holistic digital experiences, from selection to financing to vehicle maintenance. To win their business, you must be Auto brands and support service businesses are ready to deliver flexible and seamless payments and meet expectations of instant gratification.”
Rewards and incentives are becoming a larger part of what makes a satisfying car buying experience, boosting loyalty for those who will buy their next car.
Read: Kelly Blue Book says new car prices are rising for the fifth month
According to an Onbe report, “Millennials want instant gratification and smoother digital experiences when they buy a car and when they receive payments, whether it’s related to loyalty programs, service center visits, or car loan redemptions. By providing better digital experiences that engage consumers both online and through Mobile devices, the auto industry can increase brand loyalty and gain repeat business.”
While it is estimated that only 2% of car sales occur online today, this number is expected to increase as younger digital demos become the primary customer base, outperforming Baby Boomer and Generation X buyers.
In an interview with PYMNTS, Tariq KabritCo-Founder and CEO of Online Car Market in Dubai sizeHe said that car buying will increasingly move into the digital realm and his customers expect ease of payments and price transparency in a sector unknown to either.
Think Amazon, Airbnb, Uber – none of that [platforms] Own inventory. What they did was create the infrastructure [like] Integration of technology, payment logistics, operations, customer support, then connect supply and demand […]Capitol said. “So, in the automotive field, we feel that the winner is likely to be a platform as well.”
Read: Car dealers need to think more like Uber and Open Table to sell cars online
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