The sales and finance process is destined for a big change—and dealerships agree. In fact, a recent eLEND Solutions survey of dealers nationwide showed that eight in 10 agree that a connected online and in-store experience will help them sell more cars faster and increase profitability.
This acknowledgment by dealers that it’s time for a change in the car-selling process will come as good news not only to the industry as a whole, but also to consumers. Study after study continues to show that auto shoppers find the current buying process arduous.
In fact, DrivingSales.com’s recent Consumer Experience Study showed that 99 of 100 car shoppers begin their purchase journey expecting it to be a “hassle.” This is a perception that must change—and it’s a change that should give dealers a huge boost because 56% of consumers in that same study say they would buy a vehicle more often if the process were not so difficult.
Buyers Want an Engaging Experience
In the past decade, consumer expectations have evolved significantly, shaped largely by other retail experiences—and by technology. This has made the traditional, in-store buyer’s journey unengaging and unsatisfying for consumers. They want a pleasurable shopping experience, and are willing to pay more for it.
An AutoTrader.com study recently found that experience trumps pricing: 54% of consumers would buy from a dealership that offered their preferred shopping experience instead of from a dealership that offered the lowest price.
Another upside of connecting online and in-store is that transparency becomes a two-way street. In other words, it forces more transparency from consumers by bringing financing (prequalification, not just prescreening) online—meaning dealers will have key consumer information upfront that they can use to help match consumers with the right vehicle and the right lender program.
The vast majority of dealers (95%) in the eLEND survey agree that the industry should strive to create one easy, streamlined buying experience by starting both the sales and financing processes online. They believe it will help sell more cars faster and lead to greater customer satisfaction—and nearly 70% of dealerships say this is a goal for their dealership.
The same survey revealed that 80% of dealers believe Consumer Financial Protection Bureau (CFPB) regulations will be implemented in the industry, but the majority of these dealers (60%) lack a plan to meet the impending regulations.
Of course, the proposed regulations have been viewed with dread because they will likely replace dealer participation with markup thresholds or a flat-fee model. On the upside, there would most certainly be an improvement in the customer experience that would, in all likelihood, negate the potential loss of revenue by increasing the volume of deals that dealers complete.
Establishing a connected buying experience that starts the sales and finance processes together online is an approach that can help dealers modify current negotiation/finance purchase-contract processes—the ones that are likely to be required as a result of the probable CFPB changes to dealer participation policies.
These survey results underscore what we already know: that the time has come for an improved sales and financing process, regardless of what happens with CFPB. The message is clear: The days of the four-hour, disconnected sales/financing process are nearly over as more and more dealerships look to move the sales and financing process online—and connect it end-to-end.
Pete MacInnis is founder and CEO of eLEND Solutions, a company that is focused on providing a more efficient sales and finance process for the entire retail automotive industry. eLEND Solution’s patented platform streamlines car selling by bringing more functionality online. The company’s suite of products includes Credit Plus, ID Drive, and MobiLot.
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