2023 Capital One Car Buying Outlook

Car buyers agree that dealer adoption of digital tools makes the car buying experience more transparent

Car buyers’ perceptions of the buying process continue to be impacted by rising interest rates, sustained inflation and volatile gas prices. Dealers appear to be underestimating the effect of the economic environment on car purchases, with nearly all (84%) saying it is a good time to buy a car while a third (33%) of buyers say the same.

The 2023 Car Buying Outlook captures car buyers’ and dealers’ perceptions on key areas of car buying: economic impacts, transparency and trust, digital tools and financing innovation, and in-person and online car buying.

Key Findings:

  • Both dealers and car buyers say inflation is the top economic factor impacting car purchases, but dealers appear to underestimate the degree to which economic factors are impacting purchases. Car buyers continue to expect inflation to impact future car purchases. 

  • Dealers (68%) are approximately three times more likely than car buyers (21%) to say that the car buying process is very or completely transparent. The gap in transparency perceptions remains stable since the March 2022 Car Buying Outlook

  • While 88% of car buyers say trust is at least somewhat important when working with a car dealership, less than half say they completely or somewhat trust dealerships (44%). Over three-quarters (76%) would return to the same dealership if they have a positive experience.

  • Nearly half of car buyers who use digital tools for financing say the car buying experience has gotten easier (45%) in the past year while those who do not use digital tools for financing say it has become harder (50%). Prior to going to the dealership, most car buyers say they want to complete researching information on vehicles online (59%) and just over a third (34%) want to understand their financing options. 28% of dealers expect car buyers to do their research on vehicles before going to their dealership. 

  • While two-thirds of car buyers (67%) say they would like dealers to enhance their digital tools, car buyers also believe that in-person aspects of the buying process, such as the test drive, are important. 92% say test driving the car is an important part of the car buying process and nearly three-quarters say they want to communicate with dealerships in-person only (72%). Dealers, however, understand the car buyers’ needs for digital innovation and plan to invest in advancing their digital offerings (32%) and their website (31%) in the next 1-2 years.

“Car buyers want to work with quality dealers they trust, and dealers can earn trust by providing transparency throughout the entire car buying experience—particularly while both buyers and dealers are facing headwinds unique to the auto industry,” says Sanjiv Yajnik, President of Financial Services at Capital One. “Dealers who can successfully create amazing experiences for buyers both online and in person have the greatest opportunity to build relationships with them—and ultimately win in the market.”  

The Economy

Dealers are seemingly more optimistic about the economic outlook than car buyers. While 84% of dealers say right now is a good time to buy a car, only a third of car buyers say the same. Nearly half (47%) of car buyers say it is not a good time to buy a car. 

Both car buyers and dealers say that inflation is the top economic factor that impacted recent car purchases. Inflation (57%), increases in gas prices (40%), and increases in used car prices (40%) are cited as the top three economic factors that impacted car buyers’ most recent vehicle purchase. Similarly, inflation (72%), increases in gas prices (47%), and increases in new car prices (46%) are the top factors car buyers anticipate in their future purchase. Inflation (42%), increases in gas prices (38%), and increases in new car prices (38%) are also cited as the top three economic factors that dealers cited as impacting customers’ vehicle purchases.

A quarter of those whose car purchase was impacted by economic factors say they have put their purchase on hold. Over a third say they decided to wait to purchase a car until they have more confidence in the economy (38%) or until they have more financial stability (35%). 

Transparency and Trust

Car buyers and dealers both agree that transparency in the car buying process means price and financing fairness. Nearly half of car buyers say transparency means the price of the car and financing seems fair (49%), and that the description of the car and its features are accurate (47%). Similarly, a plurality of dealers say that transparency means that the price of the car is appropriately priced given market value (35%), information found online is accurate (35%) and financing options are fair and clearly communicated (34%). 

Although car buyers and dealers align that aspects surrounding pricing (final sales price and price of add-ons) are in need of increased transparency, car buyers continue to perceive that the process is less transparent than dealers do. 21% of car buyers say the process is either very or completely transparent compared to 68% of dealers. About a third of car buyers say the final sales price (35%), price negotiations (33%), and whether they’re getting a fair deal (33%) are the parts that need increased transparency the most. Additionally, the majority of car buyers say that unlisted additional fees make the process less transparent (65%). Similarly, nearly 3-in-10 dealers say fairness of the deal (27%), and actual price of add-ons and how they impact monthly payments (27%) are the areas that most need increased transparency.

Dealers appear to underestimate how much trust in the dealership matters to the car buyer during the process. Although over half of car buyers say they are more committed to the car they want than the dealership (57%), 88% say that when working with a dealership trust is important. While car buyers say they would be willing to pay a little more for a car if it was from a dealership they trust (55%), less than half of dealers say car buyers would be willing to do this (48%). 

With nearly all dealers agreeing that repeat customers are important (99%), it is crucial car buyers have a positive experience and build trust with dealerships. A majority of car buyers say they are looking to build a long-lasting relationship with a dealer they can trust (58%) and over three-quarters say that they will want to use the same car dealership for future purchases if they have a positive experience (76%).

Digital Tools and Financing Innovation

Car buyers say that digital tools make the car buying process more transparent, making innovation in this area important for dealers. While over half agree that dealers have the necessary digital tools in place to enhance the car buying experience (56%), two-thirds (67%) would like dealers to enhance their digital tools to allow for an easier overall experience. Over half say that dealers' adoption of digital tools that allows them to see inventory/prices online has made the car buying process more transparent (59%) and that dealers’ adoption of digital tools has allowed them to better understand the car buying process, making it more transparent for them (56%). 

Third-party digital tools have the potential to make car buying more transparent—as long as their estimates can be trusted. Most car buyers (57%) and dealers (84%) say that third-party digital tools that allow customers to get pre-qualified for financing make the process more transparent. However, both car buyers (55%) and dealers (68%) agree that inaccurate financing estimates provided by third-party digital tools don’t match final rates and payment, thereby making the process less transparent.

Dealers understand the importance of innovation with nearly all saying it is important1 (93%) to their dealership. At least a third of dealers believe innovation means increasing their capabilities and offerings around electric vehicles (35%), advancing digital offerings on their website (34%), and implementing technology throughout the car buying process (33%). 

Dealers report being highly or considerably familiar (79%) with available digital tools2 and technology to manage their business. At least 40% of dealers say they plan to digitize lead generation (44%), deal structuring (43%), post-purchase communication (43%), and new customer prospecting (40%) in the next six months. A plurality say that new customer prospecting (17%) will benefit the most from digitization. These steps towards digitization are important for car buyers as most say dealerships should provide more information upfront about pricing and financing so they are better informed (77%). 

Reliability/performance of new digital tools (44%), budget or cost (41%), and ease of adoption/incorporation into new business models (40%) are the top barriers to dealerships adopting digital tools and technologies. Adoption of technology (38%) is cited as the most overwhelming area of go-forward operations. Ease of integration into current systems (33%), ease of set up (31%) and provides high quantity of qualified leads (31%) are ranked as the most important aspects that would influence a dealer’s decision to use a digital retailing solution3

Car Buying Experience

While the car buying experience largely begins online, car buyers find the in-person process important. Car buyers begin by figuring out what they can afford (30%) and research to find the car they want to purchase (24%). However, nearly all car buyers say the test drive is important (92%) in their buying process. Approximately 4-in-10 say by the time they walk into the dealership, they are ready for a test drive (39%). 

Nearly half of car buyers say the car buying experience has gotten more difficult in the past year (47%), up 20 points from the March 2022 Car Buying Outlook (27%). Similarly, of car buyers who believe the experience has gotten more difficult, car price increases (73% in 2023 v 60% in 2022) are cited as the main reason they say the car buying experience has gotten more difficult. 

Car buyers and dealers continue to agree on an online and in-person approach to car buying. Around 4-in-5 car buyers (83%) and 3-in-4 dealers (74%) say at least half of the car buying process is done in person, with current car buyers saying that understanding financing options (52%) and discussions around financing and pricing (59%) was done mostly or entirely in person. Research on vehicles (47%) and local inventories at nearby dealerships (43%) was mostly or entirely done online.

More than half of car buyers expect to research information on vehicles (59%), make sure the price is fair (53%) and select the preferred make/model of the car they want (52%) online before going to the dealership. While dealers largely expect consumers to research vehicles (28%) before going to the dealership, they say that car buyers also look online to understand financing options (28%) and know what interest rate they qualify for (28%). Car buyers, however, appear to prefer to talk about financing options in person.


The Capital One Car Buying Outlook consists of findings from two surveys targeted to car buyers and dealers, both of which were conducted on behalf of Capital One Auto Finance through Morning Consult. 

The car buyer survey consists of 2,210 U.S. car buyers, ages 18+. 661 purchased a car in the last six months and are considered “current car buyers”, while 1,549 said they’re planning to purchase a car within the next year and are considered “future car buyers”. The survey was fielded October 10-15, 2022, with a margin of error of +/- 2%.

The dealer survey consists of 400 U.S. car dealers. These respondents currently 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 11-13, 2022, with a margin of error +/- 5%. 

Findings are compared to the July 2022 Car Buying Outlook (fielded to 2,209 car buyers and 400 car dealers between June 7-13, 2022), the March 2022 Car Buying Outlook (fielded to 2,200 car buyers and 530 car dealers between October 20-29, 2021), and the 2021 Car Buying Outlook (fielded to 1,000 car buyers and 401 car dealers between October 1-20, 2020). 

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company which, along with its subsidiaries, had $333.0 billion in deposits and $455.2 billion in total assets as of December 31, 2022. 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.

About Morning Consult  

Morning Consult is a global decision intelligence company changing how modern leaders make smarter, faster, better decisions. The company pairs its proprietary high-frequency data with applied artificial intelligence to better inform decisions on what people think and how they will act. Learn more at morningconsult.com


1Important indicates response selection of “highly” or “somewhat” important.

2Digital tools refer to any online tool meant to aid in the car buying process.

3‘Digital retailing solution’ is meant to be any tool that allows a customer to complete any part of their car purchase online