WESTLAKE VILLAGE, Calif., July
28, 2015 /PRNewswire/ -- A majority of new-vehicle buyers
in the United States indicate that
it should take no more than two hours to complete a vehicle
purchase from the time they walk into the dealer
showroom1; however, industry data finds the median
amount of time actually spent completing a new-vehicle purchase is
four hours,2 according to the June 2015 PowerRater Consumer Pulse.
PowerRater Consumer Pulse is a monthly analysis developed
jointly by J.D. Power and DealerRater. An alliance between J.D.
Power and DealerRater integrates each company's capabilities to
gather comprehensive vehicle shopper feedback based on J.D. Power's
customer satisfaction research and DealerRater's customer ratings
and reviews of car dealerships.
Key Findings
- More than two-thirds (67%) of luxury and 62 percent of mass
market buyers indicate it should take no more than two hours to
complete a vehicle purchase from the time they enter the showroom.
Half of buyers from each segment indicate the ideal duration is
somewhere between one and two hours.
- Slightly more luxury vehicle buyers than mass market vehicle
buyers prefer to spend less than an hour in the dealership (18% vs.
13%, respectively).
- According to the J.D. Power 2014 U.S. Sales Satisfaction Index
(SSI) StudySM, buyers who use the Internet to shop for
their new vehicle prior to visiting the dealership spend more time
overall completing their purchase than those who do not research
online. In addition, buyers that used the internet are more
than twice as likely to have compared prices from different
dealers, and are more likely to know the expected price before they
visit the dealer, than those that didn't.
"Many retailers are expending enormous amounts of energy and
capital to achieve a one-hour transaction time frame for their
sales process. While this quest is noble―and customers do want to
spend less time than they are currently―buyers tell us that one to
two hours is a very reasonable time window," said Gary Tucker, chief executive officer of
DealerRater.
According to the J.D. Power 2014 SSI Study, most of a vehicle
buyer's in-dealership experience is currently spent on selecting a
vehicle for purchase and negotiating the deal (60 minutes each, on
average). This is followed by an average of 30 minutes to discuss
and sign the necessary paperwork and an additional 30 minutes to
take delivery of the vehicle. This leaves the remainder of the
overall time spent waiting both before and after the paperwork
process, a key area to focus on in terms of creating a more
seamless and efficient process flow.
"From a generational standpoint,3 Gen Y buyers spend
more time negotiating than other generational groups , as they are
more likely than the other generations to conduct research online
prior to purchase and to have concerns regarding affordability,
which emphasizes the importance of the negotiation phase for Gen
Y," said Chris Sutton, vice
president, U.S. automotive retail practice at J.D. Power. "Both
Gen Y and Gen X buyers spend less time taking delivery, likely
because they need less instruction on the features and
functionality of their new vehicles."
According to Sutton, "It's important for dealers to be efficient
with customers' time. Customers will value specific parts of the
process, such as finding the right vehicle, understanding features
and controls and understanding how much and for what they're
paying. The dealer needs to strike an effective balance between
educating the customer and efficiency."
The 2014 SSI Study data finds that time spent in the dealership
has a significant impact on overall customer satisfaction. While
satisfaction among new-vehicle buyers who spend less than two hours
in the dealership averages 861 on a 1,000-point scale, satisfaction
declines to 844 among those who spend between two and three hours
in-dealership and drops to 807 among those spending four to five
hours to complete the purchase process.
Where Improvements Can Be Made
To improve customer satisfaction with the buying process,
dealers should develop more efficient processes during the
different phases of the buying process (vehicle selection,
negotiation, paperwork and vehicle delivery). Reducing the amount
of time a customer has to wait when purchasing a new vehicle is a
key opportunity for dealers.
About J.D. Power and Advertising/Promotional Rules
www.jdpower.com/about-us/press-release-info
About McGraw Hill Financial www.mhfi.com
About DealerRater http://www.dealerrater.com/company/
Media Relations Contacts
John
Tews; J.D. Power; Troy,
Mich.; 248-680-6218; media.relations@jdpa.com
Wendi McAden; DealerRater;
424-903-3644; wmcaden@pacificcommunicationsgroup.com
No advertising or other promotional use can be made of the
information in this release without the express prior written
consent of J.D. Power or DealerRater.
www.jdpower.com/corporate www.DealerRater.com
1 Based on a survey conducted between May 5 and May 19, 2015, of 8,810
consumers who wrote a review on DealerRater.com after recently
purchasing a new vehicle
2 Source: J.D. Power 2014 U.S. Sales Satisfaction Index
(SSI) StudySM
3 J.D. Power defines
generational groups as Pre-Boomers (born before 1946); Boomers
(1946-1964); Gen X (1965-1976); Gen Y (1977-1994); and Gen Z
(1995-2004)
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SOURCE J.D. Power