In-person dealership experience remains vital for car buyers, even while using digital tools to streamline early stages of the process. And a car buyers’ trust in dealers is a key indicator of how transparent they perceive the car buying process—even with access to digital tools to complete key elements of their purchase.
Those are just some of the takeaways from the 2024 Capital One Car Buying Outlook. The report notes 48 percent of car buyers said they would be willing to go to a car dealership with higher prices if it was a dealership they could trust.
“The car buying experience calls for a unique standard of transparency and trust,” said Sanjiv Yajnik, president of financial services at Capital One said in a statement with the outlook’s release. “Finding common ground is the key to robust sales and satisfied, loyal customers.”
Interactions At Dealerships
Capital One officials explained that using online soft credit pulls and pre-qualification allows car buyers to enter a dealership with a sense of their pricing options. This is where face-to-face interactions with knowledgeable salespeople become vital for dealers to foster trust and transparency.
Highlights of the new CapOne report include:
- 88 percent of car buyers conduct at least half of the car buying process in person, a five percentage point increase from last year’s report.
- 26 percent of car buyers said working with a dealer they trust is the most important part of the car buying experience—only 10 percent said getting the best price for the vehicle was most important.
- Salespeople make the greatest difference in that in-person relationship—60 percent of buyers said sales reps contribute to trust.
- Car buyers who feel the car buying process is transparent are almost three times as likely to trust car dealers. And those who trust dealers are over seven times more likely to find the car buying process transparent.
Transparency is Key
The authors of the report explained that trust can help drive car buyers to a dealership, and transparency is an important source of trust as 52 percent define transparency as a car’s price and financing being clear. Digital tools play a key role in fostering this trust by making timely, transparent information easily accessible to both buyers and dealers.
Interestingly, more dealers than buyers think the process is transparent. When it comes to perceptions of transparency in car buying, this gap between dealers and buyers is closing, but still persists.
To that end, CapOne officials point to 55 percent found the buying process “very” or “completely” transparent, compared to 28 percent of buyers in the 2023 report; 73 percent of dealers believe the process is transparent, closing the gap with car buyers to only 18 percentage points from the 40 percentage point gap in 2023; and car buyers are twice as likely to return to the same dealer for their next car purchase if they find dealers trustworthy.
Going Digital for Information, Efficiency
The report detailing how digital tools are reshaping the early stages of car buying, with both dealers and buyers agreeing that digital tools help streamline the process.
Despite that, few buyers complete the entire car buying experience digitally—instead arriving at the dealership armed with detailed knowledge about models, inventory and financing. This empowers car buyers to maximize their time on the showroom floor, making the in-person experience more focused, efficient and informed.
As a result, 72 percent of buyers said they spent more than a month actively shopping for a car before they completed a purchase; 45 percent more likely to say the car buying process was transparent if they complete a soft credit pull for pre-qualification.
The issue: just over half (55 percent) complete a soft pull pre-qualification. Those doing so the most frequently are first-time buyers (74 percent), Gen Z (59 percent) and Millennials (68 percent).
“The combination of powerful online tools and meaningful face-to-face interaction to build relationships is what drives this industry,” said Yajnik. “Dealers that make the most of both avenues can give buyers the transparency they want, and when buyers feel the car buying process is transparent, they’re far more likely to trust dealers.”
