Dealers and Digital Tools Essential to Future of Car Buying

New Capital One research reveals the impact of digitization on car buying; consumer and dealer sentiments around auto financing

Consumers are using digital tools to make purchases more than ever before. Yet, when it comes to car buying, data shows the in-person experience at dealerships remains crucial to finalizing the deal. Why?

With COVID-19 affecting how people travel and where people live, potential car buyers are facing lifestyle shifts that impact how they think about their car ownership journey. Capital One launched its inaugural Car Buying Outlook to understand both consumer and dealer preferences, attitudes, and behaviors around auto financing within the car-buying process. 

The Car Buying Outlook revealed that, while there’s been a shift towards embracing digital tools during the car-buying process, certain in-person elements at the dealership remain important.

During the pandemic, consumers increasingly turned to digital tools for car buying. At the same time, they overwhelmingly showed a desire to involve their dealer as an essential part of the car buying process to provide expertise, clarity and validation.

In fact, 94% of car buyers said they would involve a dealership in their car-buying experience, with only 6% of car buyers being comfortable buying a car without a dealership. 1

The Value of the In-person Experience

By the time future car buyers set foot at the dealership, more than half will have researched vehicles (69%), explored local inventories (55%), and selected a vehicle make or model (52%) mostly or entirely online. But for all their research, they are likely to still have questions about financing.

Dealers can meet car buyers where they’re at in their journey and optimize their time spent at dealerships by focusing on what’s most important to car buyers during an in-person visit: the test drive and financial discussions. 

“A car is a major purchase and consumers crave transparency as they make this important decision," said Sanjiv Yajnik, President of Financial Services, Capital One. "While technology can help car buyers shop with confidence, dealers can help reduce friction in the car buying process, build trust around financing and mutually work toward a great deal.”

Financing With Transparency

Most dealers say that less than half of their customers have their financing figured out when they come in to the dealership2, and that they typically need to educate or provide car buyers with additional information around financial terminology. A whopping 68% of deals fall through when finances enter the conversation.3

Digital tools that can provide transparency and help to reduce friction around financing conversations may alleviate the unease that accompanies this part of the car-buying journey. 56% of dealers said they increased their use of digital tools to combat business challenges brought on by the COVID-19 pandemic, and digital tools may help bridge the gap on financing. 

With digital tools inevitably playing a bigger role in a post-pandemic world, dealers agree they need to optimize their digital finance capabilities, and 35% plan to invest in their financing operations in the next 1-2 years.

Future-forward Innovations

“At Capital One, we're committed to reimagining car ownership,” said Yajink. “The next generation of car buying is centered around enhancing the shopping experience through proactivity and personalization - by applying human-centered design and forwarding-leaning technology."

Capital One built Auto Navigator to bring transparency throughout the car-buying process. It helps customers find the car they want, and then empowers them with their real rate and payment information, all without affecting their credit score, so they’re ready when they step foot into a dealership. 

Dealers who embrace digitization are positioning themselves for success with their customers. 76% of car dealers agree digital tools paired with their staff’s personal touch will enhance relationship building.



Capital One’s Car Buying Outlook comprises findings from two surveys targeted to consumers and dealers. 

The consumer survey of 1,000* U.S. adults ages 18+ was conducted on behalf of Capital One Auto Finance using Ipsos. *Of the 1,000, 348 have bought/leased a car in the last 6 months and 652 self-reported that they’re planning to buy/lease a car within the next two years. The survey was fielded October 1-14, 2020, with a margin of error of +/- 3.1%. 

The dealer survey of 401* current car dealers was conducted on behalf of Capital One Auto Finance using Beresford. *Of the 401 respondents, 132 were self-reported as owners, 133 as general managers, 30 as F&I directors, 83 as sales managers and 23 as internet managers. The survey was fielded October 14-20, 2020, with the margin of error +/- 4.8%.

1Dealerships where negotiations are the norm (50%), set-price dealerships with no-haggle price (29%)  and online-only dealer with no-haggle policy (16%)

226% - 50% financing figured out (46%), 1 – 25% financing figured out (51%) (dealer sample: 401)
3Negotiations on car price (34%), discussions about financing (20%), negotiations on trade-in price (14%) (consumer sample: 1,000); Negotiations on car price (26%), discussions about financing (22%), negotiations on trade-in price (20%) (dealer sample: 401)

Related Content


Eno Proactively Highlights Your Charitable Donations

Capital One’s intelligent assistant Eno helped identify nearly $1.2B in charitable donations in 2020