New-Vehicle Buyers’ Survey Says Treatment Trumps Price

The way a dealership treats customers is more important to overall new-vehicle buyer satisfaction than the actual transaction price, according to a new J.D. Power and Associates survey.

The study finds 52% of new-vehicle buyers cite dealer treatment as a reason to purchase their new vehicle from a specific location.

In comparison, 38% of buyers cite vehicle price or the deal offered as the reason for selecting their dealer.

Once the dealer is selected, the ease of coming to an agreement on the final vehicle price influences buyer satisfaction more than the price itself.

“The process of working out the deal is the primary indicator of whether new-vehicle buyers have a satisfactory purchase experience,” says Jon Osborn, J.D. Power’s director of automotive research.

Some buyers enjoy negotiations; many don’t, he says, advising retailers “to make this process as efficient and collaborative as possible, given its importance to overall satisfaction.”

With the exception of selecting a vehicle, negotiating the deal is the aspect of the new-vehicle buying process that takes the longest time, averaging 53 minutes.

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. Among luxury brands, Lincoln demonstrates the greatest improvement from 2009, moving from sixth rank position to fourth in 2010.

How brands ranked in satisfaction survey

Mini ranks highest among mass-market brands, performing particularly well in dealership facility, salesperson and delivery process. Mercury (a brand Ford Motor Co. is dropping) 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).

The study also finds 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, 18% of buyers end showroom visits primarily due to poor customer treatment by a salesperson.

While some new-vehicle buyers complain about dealer sales staff applying too much sales pressure, an equal proportion complain about receiving insufficient attention. Other oft-cited complaints include dealer staff showing a lack of courtesy or straightforwardness.

“With new-vehicle retail sales remaining soft and manufacturers spending considerable amounts on incentives to get customers into showrooms, the value of prospects coming in to a dealership is extremely high,” Osborn says. “Dealers cannot afford to drive away customers through poor treatment.”

Many spurned shoppers end up purchasing a different brand, he says. “Both the individual dealer and the auto maker lose out.”

The study found the Internet continues to play an increasingly important role in the new-vehicle shopping process, with 79% of new-vehicle buyers going online 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 greater dissatisfaction with how long it took.

“Dealers need to streamline the new-vehicle buying process for customers who do a lot of research online,” Osborn says. “These buyers tend to be affluent, well-informed and time-sensitive. They generally know the exact vehicle they want and how much they expect to pay for it.”

Accordingly, “they want to get in and out as quickly as possible,” he says. “Dealers need to balance respect for the customer’s time while still providing what the customer needs.”

The 2010 U.S. Sales Satisfaction Index Study is based on responses from 25,244 new-vehicle buyers who purchased or leased their new vehicle in May 2010. The study was fielded between August and October 2010.