Announcing the 2022 Car Buying Outlook
Car buyers embrace more digitized experience before heading to the dealership
New research from Capital One finds dealers deliver an increasingly digital car buying experience while future car buyers plan to visit more dealerships.
Plano, Texas, (March 9, 2022) – After two years of disruption caused by the pandemic, car buyers are embracing a purchasing journey that begins online and culminates at the dealership, while dealers digitize to meet them in the channel of their choice. That’s according to the 2022 Capital One Car Buying Outlook, which captures car buyers’ and dealers' perceptions of the car-buying experience.
Key findings include:
- 75% of car buyers are most comfortable purchasing a vehicle with either a mix of online and in-person elements or an in-person only approach, and 6% are most comfortable buying completely online.
- 39% of future car buyers plan to visit at least three dealerships for their next car purchase, compared to 28% of recent car buyers.
- In 2022, more dealers have invested in digitization, with 87% reporting innovation is important, an increase of 43 percentage points from 44% in 2021.
- 52% of dealers report their dealership is highly or completely virtual, an increase of eight percentage points from 44% in 2021.
“Two consecutive years of pandemic-related impacts have accelerated digitization and innovation in the automotive industry and significantly transformed how dealers and car buyers engage,” said Sanjiv Yajnik, President of Financial Services at Capital One. “In order to meet car buyers where they are, dealers are prioritizing developing digital tools, as they work toward a seamless, more transparent omnichannel experience.”
Additional survey findings include:
Perceptions of Transparency
Over the past year, car buyers’ and dealers' perceptions of transparency in the car-buying process trended in opposite directions. Dealers report the process has become more transparent while buyers report it is less transparent.
- 77% of dealers report that the car-buying process was transparent, an increase of 23 percentage points from 54% in 2021.
- 26% of car buyers report the car-buying process as transparent, a dip of 14 percentage points compared to 40% in 2021.
- When asked about frustrations during various aspects of the car-buying process, car buyers rate every aspect as less frustrating compared to the 2021 findings.
This decrease in perceived transparency by consumers may be attributed to the difficulties induced from the current economic and supply chain issues.
- 66% of car buyers report the parts shortage has affected their car buying plans.
- 60% of car buyers report the car buying process has gotten harder because car prices have increased, 29% because used car options are too limited and 26% because it’s difficult to find the kind of car they actually want.
Approaches to Digital Car Buying
Dealers anticipate a more digital car-buying process while car buyers plan on adopting a mix of in-person and online elements while buying a car. Customers intend to do their research online, but transition to in-person as they get further into the process.
- Compared to last year, twice as many dealers think their customers are conducting every aspect of the car-buying process online (mostly online/entirely online).
- Car buyers report they plan to visit the dealership, particularly as they get further into the car-buying process.
- Nearly half of car buyers walk in dealerships because they either want to browse options in person (31%) or are looking for more information they can’t find online (13%).
- There was a 12 percentage point increase in the number of future car buyers who say they plan to discuss pricing and financing completely in-person (27% in 2022) compared to last year (15% in 2021).
- 75% of car buyers are most comfortable purchasing a vehicle with a hybrid or in-person only approach with 44% most comfortable with the hybrid mix of online and in-person interactions.
For more information, visit https://www.capitalone.com/cars/car-buying-outlook.
The Capital One Car Buying Outlook consists of findings from two surveys targeted to consumers and dealers.
The consumer survey of 2,200 U.S. adults ages 18+ was conducted on behalf of Capital One Auto Finance using Morning Consult. Of the 2,200, 643 have purchased a car in the last six months and are considered “current buyers”, and 1,557 self-reported that they’re planning to purchase a car within the next two years and are considered “future buyers”. The survey was fielded October 20-29, 2021 with a margin of error of +/- 2%.
The dealer survey of 530 current car dealers was conducted on behalf of Capital One Auto Finance through Morning Consult. The 530 respondents work for an automobile dealership as an owner, general manager, F&I director, sales manager, internet manager, or in the business development center at dealerships with an approximate annual sales volume of at least $1M. The survey was fielded October 20-29, 2021 with the margin of error +/- 4%.
Year-over-year findings are compared to the 2021 Car Buying Outlook. The 2021 Car Buying Outlook was fielded to 1,000 U.S. adults ages 18+ and 401 current car dealers between October 1-20, 2020.
About Capital One
Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $311.0 billion in deposits and $432.4 billion in total assets as of December 31, 2021. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.
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