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Only 7% of UK consumers recently claimed to trust used car dealerships according to Auto Trader’s September Market Report, uncovering the full extent of a reputation problem for the used car industry.
Compared against 13 other industries, the used car industry was ranked bottom by UK consumers for trust, rating sectors such as property, finance and mobile services as industries that consumers felt they could trust more when doing business with them.
Trusted 11% less than the finance sector and 4% less than estate agents, the second lowest ranking industry for trust, the UK used car industry even ranks much lower against new car manufacturing, which ranked fourth out of 13 industries, despite the recent emissions crisis according to research conducted by Auto Trader, the UK’s largest digital automotive marketplace.
5,000 consumers were surveyed for the Market Report which revealed that when considering whether they trusted the used car dealership they bought from in the last six months, only 7% of consumers felt as if they didn’t trust the person they bought from, 68% claimed a significant level of trust and 25% remained indifferent. It highlights a negative perception that’s 10 times worse than the reality for UK car buyers.
Auto Trader Operations Director, Nathan Coe, said: “Despite most consumers having positive experiences at the dealership when purchasing a car, the industry still suffers with a lack of trustworthiness which resonates strongly with consumers. Changing these perceptions will be a challenge but the reward could be substantial for the industry, it could remove some of the friction that consumers feel with the car buying process, giving way to more positive perceptions which could ultimately lead to people changing their cars more often.”
Auto Trader’s Market Report reveals that a lack of transparency within the online research process may be playing an integral role in perpetuating negative perceptions that consumers already have about the used car industry.
76% of car buyers claim that transparency on price is the most important factor in the car buying process, and with consumers now spending 11 hours researching online which is double the amount of time spent researching offline, the Report suggests that the automotive retail experience is considered less progressive than other online retail experiences by consumers today.
20% of car buyers claimed to have found vague, hard to find or misleading information recently in the car buying process. Of this group, 42% claimed it made the process more stressful and 41% said it took them longer than they would have liked to purchase their next car. Lack of transparency also had a more drastic effect on some car buying behaviours, with 38% deciding to search for another dealership or even purchase from someone else and 36% claiming they delayed or were put off buying a car all together.
There are ways the used car industry can build trust with consumers, as the Report claims some of the most important factors for car buyers in the purchase process are: access to dealer reviews (48%), price comparisons (67%) and clear information on the vehicle and history checks (68%). The sentiment highlights the way in which the car buying process is changing for consumers, relying on the opinions of others within reviews and full transparency online to build greater levels of trust and confidence when buying a car.
Some retailers have already noticed the benefits of adopting a more transparent way to retailing for consumers. Andy Bruce, CEO of Lookers Plc, said: “consumers want to be in control of the buying process and we fully recognize and encourage that. We believe our role is to provide as much information and advice as we can to allow them to make an informed choice, so it’s about helping people to buy, as opposed to selling to them. Transparency and honesty are key to this aim.”
The Market Report also revealed that car buying intentions remain positive post Brexit, with 89% of consumers (surveyed 30 days post the Referendum result), claiming the EU Referendum result will have no influence on their car buying plans. The Report does reveal, however, that with an overall drop in consumer confidence, car buyers may rely more heavily on the factors that give them the most confidence in a purchase – further highlighting the importance of trust and transparency and its potential as a competitive advantage today for car retailers.
Pointing towards a potential solution to the negative perception problem for the used car industry, Coe continues: “changing perceptions of the used car industry is a huge challenge, but it’s not unsurmountable. It will require the majority of the industry to embrace a greater level of transparency to increase trustworthiness with consumers. And those that do will certainly gain the competitive advantage.”