The results of the KPA Dealership Trust Survey are in, and boy, they are interesting! We conducted this survey with the help of The Harris Poll to understand consumers’ opinions about the trustworthiness of car dealers and their feelings about the buying/leasing process.
We asked 2,000 people about their opinions and experiences purchasing a car. What really stood out was an interesting gap between perception and reality in the car buying experience. Let’s explore why this gap matters and the implications it has for dealerships.
Here’s what Americans said…
The Reality: The American Car Buying Experience
The survey reveals that about one-third of Americans have experienced things like deceptive selling, hidden fees, or dishonest salespeople.
Watch this on-demand webinar to learn how the new CARS rule will revolutionize how you advertise vehicles and interact with customers and what your dealership needs to do to comply.
The Perception of Car Buyers Tells a Different Story
While only 1 in 3 experienced an issue during their vehicle purchase, 3 in 4 Americans don’t trust dealerships to be honest about pricing.
Americans said the following…
About their perceptions of dealerships…
Why Perception Matters: Your Reputation is Everything
Why the Reality Matters
While one-third of people experiencing a negative buying experience may not seem like a large enough percentage to grab your attention, it is large enough to raise the ire of regulators like State Attorney Generals, the CFPB, and most recently, the FTC.
The FTC has received over 100,000 complaints a year in the past 3 years regarding motor vehicle transactions, which prompted the enactment of the Combating Auto Retail Scams (CARS) Rule. If you haven’t been following along, we’ve been writing about it a lot recently. This comes on top of newly enacted rules for dealers around data privacy and safeguards.
Dealerships that don’t follow these laws and regulations can face heavy fines from the FTC at over $50,000 per violation, which is roughly equal to the cost of an average car on the lot.
Why the Perception Matters Even More
Not only are customers complaining to regulators, but they’re also leaving reviews. One negative review from a dissatisfied customer can mean you’ll need roughly 12 positive reviews to counter its effects.
Why does this matter? Consider these data points:
- 84% of consumers say reviews are important in their choice of dealerships.
- And 93% of Gen Z use reviews to make purchasing decisions and are twice as likely to have their choice of dealership influenced by social media.
When the average customer only visits 2 dealerships before making a purchase, they’re leaning heavily on a dealership’s reputation when making their decision. And a dealership that doesn’t have their car buying experience completely buttoned up runs the risk of not making that buyer’s very short list.
What Dealerships Should Do: Demonstrate Your Commitment to Transparency
“Buying or leasing a vehicle is a major financial decision for many Americans,” said KPA’s CEO, Chris Fanning “KPA partners with dealerships to help them operate in compliance with current regulations while also building trust with their customers and earning their dollars.”
As a dealership, how can you demonstrate compliance and build trust? We recommend you focus on the following four practices:
- Create a dedicated compliance team: It should include key department stakeholders including marketing, sales, accounting, and finance.
- Establish Key Performance Indicators (KPIs): Identify goals and timelines for achieving compliance and track progress along the way.
- Review “Three Ps”: Programs, plans, and policies should be reviewed to identify gaps. And develop new ones to take into account CARS Rule compliance.
- Conduct training and certification: Employees should be trained on Sales F&I Compliance (including the new CARS Rule mandates) when they are hired and throughout the year.
This demonstrates at every point in the purchase process that you are a trustworthy dealership committed to providing the best customer experience.
KPA’s Here to Help You Demonstrate Your Commitment to a Great Buying Experience
KPA provides complete compliance solutions for Advertising, Sales, and Finance compliance as a whole as well as to support CARS Rule Compliance in particular.
Survey Methodology
This survey was conducted online within the United States by The Harris Poll on behalf of KPA between January 16-18, 2024 among 2,098 adults ages 18+. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.5 percentage points using a 95% confidence level.
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