10:51 am, September 13, 2016
THE used car industry is the least trusted by consumers, according to a new survey by Auto Trader.
The car classified website’s September Market Report showed that only seven per cent of UK consumers who were quizzed claimed to trust used car dealerships.
The used car industry was compared against 13 other sectors, including property, finance and mobile services industries, but was ranked lowest.
Estate agents were trusted four per cent more than the used car industry, with the finance sector seven per cent higher than that. The new car industry scored much higher, coming in fourth out of the 13.
Auto Trader operations director Nathan Coe said: ‘Despite most consumers having positive experiences at the dealership when purchasing a car, the industry still suffers from 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, which surveyed 5,000 consumers, 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.
More than three-quarters of car buyers (76 per cent) quizzed claimed that transparency on price was the most important factor in the car-buying process, and with consumers now spending 11 hours researching online – 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.
One-fifth of car buyers (20 per cent) claimed to have found vague, hard-to-find or misleading information recently in the car-buying process. Of this group, 42 per cent claimed it made the process more stressful, and 41 per cent said it took them longer than they would have liked to buy their next car.
Lack of transparency also had a more drastic effect on some car-buying behaviours, with 38 per cent deciding to search for another dealership or even buy from someone else and 36 per cent claiming they delayed or were put off buying a car completely.
There are ways the used car industry can build trust with consumers, says Auto Trader, as the report claims some of the most important factors for car buyers in the purchase process are: access to dealer reviews (48 per cent), price comparisons (67 per cent) and clear information on the vehicle and history checks (68 per cent). 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 of retailing for consumers. Andy Bruce, the chief executive of Lookers, said: ‘Consumers want to be in control of the buying process and we fully recognise 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 remained positive post-Brexit, with 89 per cent of consumers – who were surveyed 30 days after the referendum result – claiming that the result would 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.’
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