Time costs money: every second counts for car dealers
It’s time for car dealers to get serious about sales. A new study has shown that every second counts when it comes to closing a deal, and the longer it takes, the less satisfied is the customer.
Data from AutoTrader has shown that one of the most critical factors in car selling is the amount of time it takes.
According to the firm, customer satisfaction is at its highest within the first 90 minutes on the day of purchase. But satisfaction rates drop when the time spent purchasing goes beyond 1.5 hours. And at 2.5 hours, satisfaction drops below buyers’ average satisfaction score.
Cox Automotive has recently published a white paper on the issue, which contains in-depth analysis of four dealerships’ cycle times across post-vehicle selection to pre-delivery of vehicle.
The study found that inefficiencies in people, process and technology contributed to the lengthened time it took to complete the three primary processes: sales, vehicle appraisal and finance and insurance (F&I).
The sales process took an average 53 minutes to complete – more than half the desired ideal total customer cycle time of 90 minutes. Negotiation took 21 minutes on average, and a maximum of 41 minutes, making this a time-consuming part of the car selling process.
When it comes to vehicle appraisal, an average of 43 minutes was dedicated to this process; almost half of the total desired customer cycle time. Negotiation took an average of 16 minutes and a maximum of 39 minutes, meaning that a significant amount of time can be consumed during the appraisal process too.
The F&I process took even longer. The average time for this part of the deal took nearly 61 minutes – two-thirds of the the ideal total customer cycle time. This was further lengthened by paperwork; filling out multiple forms took an average of 21 minutes and a maximum of 44 minutes, making the process a long-winded affair.
Jared Rowe, president of AutoTrader.com, said dealers must bring more transparency and efficiencies into the car buying process to help them exceed buyers’ expectations.