Seventy-five per cent of consumers are comfortable buying a vehicle through either a fully online approach or a combination of online and in-person elements, according to the 2022 Capital One Car Buying Outlook.
The company’s report, released in March, also shows that 6% of consumers are most comfortable with buying completely online. More dealers invested in digitization this year, with 87% noting that innovation is important—up from 44% in 2021.
“Two consecutive years of pandemic-related impacts have accelerated digitization and innovation in the automotive industry and significantly transformed how dealers and car buyers engage,” said Sanjiv Yajnik, President of Financial Services at Capital One, in a news release.
He said that in order to meet car buyers where they are, dealers are focusing on developing digital tools and are working towards a “seamless, more transparent omni-channel experience.”
Fifty-two per cent of dealers surveyed said their dealership is highly or completely virtual—up from 44% in 2021. The report also indicates that 39% of consumers who plan to buy a vehicle intend to visit at least three dealerships for their next purchase, versus 28% of recent car buyers.
However, based on the study dealers may need to improve transparency in the car buying process, as only 26% of consumers said the process is transparent—down from 40% in 2021. On the other hand, more dealers feel the process is more transparent (77% in 2022 versus 54% in 2021). And yet, the princess is still less frustrating than it was last year.
“When asked about frustrations during various aspects of the car-buying process, car buyers rate every aspect as less frustrating compared to the 2021 findings,” said Capital One in its news release, adding that “This decrease in perceived transparency by consumers may be attributed to the difficulties induced from the current economic and supply chain issues.”
The study follows up on this by indicating that 66% of car buyers report the supply chain/parts shortage issue did affect their car buying plans. Sixty per cent said the buying process is now more difficult because the sticker price of the vehicle increased, while 29% said it is because the used vehicle options are limited. And 26% report difficulty in finding the type of vehicle they actually want.
As for digital retailing, Capital One said dealers foresee a more digital process moving forward, while consumers plan to adopt a hybrid approach (in-person and online). “Customers intend to do their research online, but transition to in-person as they get further into the process,” said the company.
Capital One’s study includes findings from two surveys that target consumers and dealers. Morning Consult surveyed 2,200 U.S. adults aged 18 and over and 530 current car dealers, on behalf of Capital One Auto Finance.