Treatment Trumps Price for New Vehicle Buyers

November 18, 2010

This article is included in these additional categories:

Analytics, Automated & MarTech | Brand Metrics | Data-driven | Financial Services | Retail & E-Commerce

The manner in which customers are treated by the dealership is more important to overall new vehicle buyer satisfaction than the actual transaction price, according to the J.D. Power and Associates 2010 US Sales Satisfaction Index (SSI) Study.

More Than Half of New Vehicle Buyers Cite Dealer Treatment

The study finds that more than half (52%) of new vehicle buyers cite dealer treatment as a reason to purchase their new vehicle from a specific dealer. In comparison, 38% of buyers cite vehicle price or the deal offered as the reason for selecting their dealer.

Furthermore, once the dealer is selected, the ease of coming to an agreement on the final vehicle price has the single-greatest influence on buyer satisfaction, surpassing the importance of fairness of the actual price paid. With the exception of selecting a vehicle, negotiating the deal is the aspect of the new-vehicle buying process that takes the longest time (53 minutes, on average).

8 in 10 New Vehicle Buyers Cruise Web

The internet continues to play an increasingly important role in the new-vehicle shopping process, with more than three-fourths of new-vehicle buyers (79%) using the web during the shopping process. Twenty-four percent of buyers in 2010 submitted an online request for quote to a dealer, and were, on average, more satisfied with the negotiation process and the price paid.

However, perhaps expecting a quicker sales process, these buyers are more likely to express dissatisfaction with the length of the sales process than are buyers who did not submit an online request.

6 in 10 New Vehicle Buyers Shop Multiple Dealers

The study also finds that 60% of new vehicle buyers visit more than one dealership during the shopping process. While many dealers are rejected for not having a vehicle that the buyers wanted to purchase, a significant number of buyers (18%) end showroom visits primarily due to poor customer treatment by the dealer’s salespeople.

While some new vehicle buyers complain about dealer sales staff applying too much sales pressure, an equal proportion complain about receiving insufficient attention from salespeople. Other frequently mentioned complaints include dealer staff being discourteous or not being straightforward with the buyer.

Jaguar Leaps above Luxury Brands

Overall customer satisfaction is measured across four factors: working out the deal (33%); salesperson (25%); delivery process (21%); and dealership facility (20%). For a third consecutive year, Jaguar ranks highest among luxury brands in satisfying buyers with the new-vehicle buying experience. Jaguar performs particularly well in the salesperson and working out the deal factors.

Cadillac and Mercedes-Benz follow in the luxury brand segment rankings. These two brands also ranked second and third, respectively, in 2009. Among luxury brands, Lincoln demonstrates the greatest improvement from 2009, moving from sixth rank position to fourth in 2010.

Mini Motivates Mass Market Buyers

Mini ranks highest among mass market brands, performing particularly well in dealership facility, salesperson and delivery process. Mercury and GMC, respectively, follow Mini in the mass market segment rankings. The mass market brands demonstrating the greatest improvement from 2009 are Hyundai (moving from 16th rank position to seventh in 2010) and Chrysler (moving from 15th rank position to eighth in 2010).

Overall Dealer Service Satisfaction Grows

Another recent J.D. Power automotive industry study finds that overall satisfaction with dealer service has increased from 761 in 2009 to 767 in 2010, marking the 10th consecutive year of industry-wide improvement.

Notable improvements are demonstrated in the service facility and service quality measures in 2010, compared with 2009. In particular, satisfaction has increased in the following areas: ease of driving in and out of dealer facilities; convenience of parking; thoroughness of the work performed; the total time required to complete service on the vehicle; flexibility of accommodating the customer schedules; and thoroughness of explanations.

Several other time-related metrics have improved from 2009, including customer ability to get a service appointment on the same day as their initial inquiry call and service being completed the day that the vehicle was brought in for service.

About the Data: The 2010 US Sales Satisfaction Index (SSI) Study is based on responses from 25,244 new vehicle buyers who purchased or leased their new vehicle in May 2010. The study, published by J.D. Power & Associates, was fielded between August and October 2010 and is the source of the enclosed charts.

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