DealerPolicy’s New Study Highlights There’s More to Car Buying Than Just Buying the Car
BURLINGTON, VT – DealerPolicy, a leading insurance marketplace solution for dealers, unveiled the results from its latest survey of dealers and car buyers about their experience and expectations involving auto insurance as part of the car buying process. The ‘Automotive Retail & Auto Insurance Trends for 2021’ study surveyed 300 dealership executives and 1,000 consumers who purchased a vehicle in the past six months. Although both categories of respondents agreed that insurance was a necessary part of the buying process, their sentiments differed drastically when it came to accessibility, transparency, and the convenience of auto insurance. Bottom line: dealers have a massively underleveraged opportunity to impact customer loyalty, satisfaction, and their bottom line by integrating insurance into the sales process.
The power of consistently delivering savings and buying power to facilitate a better customer experience and superior dealer profitability, is undeniable.
“We’ve long known that both dealers and buyers view auto insurance as inseparable from the car buying process, but more recently, we’ve examined where the disconnect occurs. The results were astonishing,” says Travis Fitzgerald, CEO of DealerPolicy. “The exciting news for dealers and car buyers is that an integrated tech-enabled auto insurance solution is now available to bridge the gap, presenting a cascade of benefits to everyone involved. The power of consistently delivering savings and buying power to facilitate a better customer experience and superior dealer profitability, is undeniable.”
The DealerPolicy study researched perspectives, perceptions and experiences across categories including:
- affordability and spending power
- actual versus perceived cost of insurance
- assistance with and access to insurance options at time of sale
- interest in utilizing a real-time policy-bound digital insurance option at time of purchase
- potential revenue opportunities.
DealerPolicy analysts learned that car buyers themselves believe they would benefit from an integrated insurance option that revealed potential savings. Sixty-nine percent of the buyer respondents indicated they would likely buy a nicer car, and sixty-four percent said they would likely add on F&I protection products, creating additional revenue opportunities for dealerships.
Yet only sixteen percent of dealers had a franchised insurance agent on site, and only nineteen percent connected the car buyer to an agent via phone. It is no surprise then that forty-nine percent of car buyers believe dealers did not assist with insurance at time of purchase, leaving profit and customer satisfaction on the table.
“When it comes to insurance, we developed the DealerPolicy Marketplace because of the positive impact we could have on the car-buying process, a transaction that was in desperate need of speed, choice and transparency. And now, our latest study supports the original hypothesis we had,” adds Fitzgerald.
Other key findings in the report include:
- Dealers think they are twice as helpful as consumers report when it comes to auto insurance
- 93% of dealers say they helped the customer with insurance, but…
- 49% of customers report dealers did nothing to help
The current sales process doesn’t work
- 90% of dealers think insurance could negatively impact their selling opportunity, but…
- 71% of customers would like insurance information at time of purchase, and…
- More than 60% would use those savings to buy a nicer car or F&I products
- A new car doesn’t have to mean a higher insurance rate
- Rather than shopping for competitive rates, 71% of customers simply add their new vehicle to their existing policy for a similar rate or higher, but…
- 62% of DealerPolicy Insurance customers who reported their prior policy cost saved when they compared and shopped policies online at the time of purchase.
DealerPolicy Insurance customers who saved recognized an average gain of $63 per month, or $762 per year back in their budgets. When financed, those savings translate into $3,694 of buying power, which is often reinvested in value-add F&I products to further protect their new vehicle. Dealers in DealerPolicy’s network report an average increase of 34% in their back-end gross for customers that also purchased an insurance policy through DealerPolicy Insurance.
The ‘Automotive Retail & Auto Insurance Trends for 2021’ study is part one of DealerPolicy’s two-part study. The second half dives into misconceptions and myths around digital auto insurance and will be released in early 2021. For a copy of the first study, please visit www.dealerpolicy.com/2021-dealerpolicy-study.