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Study reveals dealerships remain central to the car buying experience

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One aspect of the retail car industry that has become abundantly clear since the start of COVID-19, based on my experiences and observations, is that new car dealerships remain as vital and relevant as ever in the minds of consumers.

In an age when auto technologies and modes of transportation are advancing at a rapid pace —when a global pandemic has altered the way dealers do business forever — customers have clearly demonstrated how much they value their local new car dealership.

In fact, the view that dealers continue to play a critical role for car buyers is one of the many findings in a recent study conducted by Deloitte Canada, in conjunction with the Trillium Automobile Dealers Association.

The study, sponsored by TireLink, focused on three main areas of the automobile industry: consumer purchase expectations, consumer service expectations, and vehicle electrification.

On consumer purchase expectations, the study revealed an increased overall interest in used vehicles, possibly due to the new vehicle supply shortage and lingering concerns about consumers’ financial capacity going forward.

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Of that increased interest in used vehicles, younger consumers (18-34 years old) are more predisposed to buying pre-owned, which could be due to an affordability issue resulting from the negative economic impact of COVID-19.

When consumers are researching their next vehicle purchase, dealership websites and safety-related websites outranked all other forms of influence on the car-buying decision, including word of mouth, third-party websites, media reviews and social media.

Interestingly, among those who bought their latest vehicle from a dealership, over half didn’t visit other dealerships.

One in five consumers buy a vehicle on the same day they start visiting dealerships, while 60 per cent of buyers complete a transaction within two weeks.

This continued loyalty to dealerships is further augmented by data that says eight out of 10 car buyers still prefer to buy a vehicle at a dealership, as opposed to an online purchasing experience (this trend is unchanged from last year).

This indicates that consumers continue to place a high value on visiting dealerships, talking to salespeople, viewing cars up close and personal and taking them for test drives.

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On the topic of service expectations — when consumers bring their vehicle to a dealership for service — they rank rapid check-in/check-out (81 per cent), access to loaner vehicles (72 per cent), and real-time updates (68 per cent) higher on the priority scale than dealer amenities such as a kids’ playroom or on-site restaurant.

The final section of the study deals with the electrification of vehicles, and it identifies some key areas in this growing segment. It revealed that while interest in electrified vehicles is gaining momentum in Ontario, consumers still appear reluctant to make the full jump to an all battery-powered (BEV) mobility future.

Interest in hybrid electrics is 35 per cent among consumers polled, representing an 11 per cent increase year-over-year. Meanwhile, interest in all-battery powered electric sits at 16 per cent, also representing an 11 per cent increase.

Most EV intenders (76 per cent) expect to pay less than $50K, and many EV models are currently available at that price point in Canada, with more becoming available each year.

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The pandemic has significantly impacted how and where people work, and those trends will likely impact vehicle usage in the future.

Fifty-six per cent of respondents said that they are driving less since the pandemic, 69 per cent said that they anticipate driving the same or less going forward, and 35 per cent said they plan on working from home every day or a couple times a week.

In conclusion, the car industry is (and always has been) a people business. Car designs, technologies and customer expectations will continue to evolve, but old-fashioned in-person visits and relationships are still the driving force and lifeblood of the retail car industry.

Michael Eatson is president of the Trillium Automobile Dealers Association and is president of Peterborough Volkswagen. This column represents the views and values of the TADA. Write to  or go to tada.ca. For information about automotive trends and careers, visit carsandjobs.com.

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