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Many car buyers today want to start the financing process online before they visit a dealership, according to a recent survey by CarGurus, an online vehicle marketplace. Here are more detailed findings from this consumer sentiment survey.
A nontraditional approach
Traditionally, car buyers have tended to select a vehicle at the dealership first and then arrange to finance. But 93% of respondents to the CarGurus survey said that prequalifying for a car loan online before visiting the dealership would be helpful. In addition, 70% believe that getting prequalified will help them feel more confident and prepared to discuss financing at the dealership.
Read this before you buy another dealership.
Interestingly, while most customers say that prequalifying online ahead of time would be helpful, only half of them actually do so. One of their main hesitations is that they’ll have to repeat all the online prequalification steps once they get to the dealership.
About two-thirds (67%) of the respondents want to complete more of the car-buying process online before visiting a dealership. Given the increasing prices of new and used cars today, many consumers view purchasing a vehicle in a similar fashion to buying a home — they want to know more about financing in advance, instead of treating it as an afterthought.
Encouraging buyers to prequalify for financing online can benefit customers and dealerships alike. Not only does it satisfy a customer's desire, but prequalified leads are 60% more likely to purchase a vehicle when they visit the dealership than those who aren’t prequalified, according to CarGurus.
Transparency is critical
One of the main takeaways from the survey is the importance of dealerships offering more financing resources and rate transparency early in the car shopping process, including online. This is because the in-store finance and insurance (F&I) experience remain one of car shoppers’ least favorite parts of the car-buying experience.
Strengthen digital relationships
The survey found that 42% of respondents spent more than an hour discussing financing at the dealership. Among the biggest frustrations and fears car buyers have about dealership F&I is that the dealer’s terms won’t be fair (37%), the process will take too long (34%) and they won’t be able to understand the loan terms (25%).
Other key takeaways from the survey include 1) the need for dealerships to identify prequalified leads that come into the store’s customer relationship management (CRM) system, and 2) the importance of preparing information on these customers before their arrival.
Time for a change?
If your store doesn’t allow customers to prequalify for financing online, now might be a good time to consider offering this option. It could be a win-win for your dealership and your customers.