Tesla vehicle drivers are familiar with completing most of the car-buying or leasing steps online. But according to new research from global business management consultants EY, not everyone is ready to ditch the car dealership experience. It’s a familiar car-buying experience, especially for those who haven’t yet switched to electric cars. But dealerships are going to have to adapt quickly to the changes brought by the arrival of electric cars, or they’ll be left behind.
Test drives and physical touch
EY found that more than 50% of both owners and non-car owners (there is a difference of opinion between these two groups) prefer to experience a car physically before purchase.
Further, 57% of non-car owners and 61% of owners want a test drive, either at home or at a convenient location.
Car dealers already offer test drives as a matter of course. And for that matter, so does Tesla. My Electrek colleague Scooter Doll wrote about how to test drive a Tesla during the pandemic, and you can read that here.
But for the consumer who wants to buy an EV from a car dealership, the challenge is finding a salesperson who is knowledgeable – and enthusiastic – about EVs. Car dealership management will need to accept that the electric transition is real and happening now, and educate their staff about EV sales and servicing. Electric cars are no longer an afterthought or a novelty.
And there’s a new experience that seems to come with electric cars: acting as a sort of ambassador for BEVs with friends and family. As a whole, people seem to have real curiosity about electric cars, and educating those you know, or even letting them drive your car around the neighborhood, will often influence their decision to pull the trigger on electric vehicles.
For example, my brother-in-law reserved a Ford F-150 Lightning not long after we leased our Tesla Model 3. And friends jump at the chance to sit in the Model 3 and ask questions, or to drive it if we offer. Word of mouth is powerful if trust is already established.
Financing and price transparency
When it comes to paying for a car, 66% of non-car owners and 73% of car owners buying their first electric car prefer to get quotes and secure finance online.
Further, 36% of non-car owners and 39% of car owners prefer to know upfront how much they can spend on a car.
More than 50% of non-car and car owners also prefer a fixed final price with no haggling, and 29% agree or strongly agree that completing paperwork online is preferable to doing so at the dealership.
A fixed final price is the norm for Tesla, and while haggling is the accepted buying process at most car dealerships, not all dealerships embrace that model. For example, there is a Subaru dealership near me that only offers fixed-price cars.
Some people enjoy the horse-trading, while others find it stressful and even intimidating. But it’s clear that the majority of buyers like to go into dealerships armed with knowledge, quotes, and finance they’ve first obtained online.
As for paperwork, that low 29% surprised me, as sitting at a dealership for hours, signing and initialing what seems like hundreds of pieces of paper, is a real drag. Tesla’s online experience was so much easier. We’d love to hear from those of you who prefer to do paperwork at the dealership, and why, in the comments below.
EY’s conclusion about car dealerships
To state the obvious, the car industry is undergoing a revolution, and car dealerships are going to have to adapt nimbly, or they’ll stumble. AS EY states, “it calls for a fundamental rethinking of the dealers’ role and the relationship between dealers, [original equipment manufacturers], and customers.”
Here’s what EY concluded about the car purchasing experience:
The findings from the latest Mobility Consumer Index show most car buyers aren’t ready to move the entire car-buying process online, but they are on the road toward an online multichannel future. To adapt, dealers should become trusted advisers and copilots on the decision journey.
Using the benchmark of “trusted advisers and copilots,” I asked car salespeople for their thoughts about and knowledge of electric cars. At Mini, a make that will go all-electric by 2030, the salesperson waved off their single Mini Cooper SE as being “somewhere over there” on the lot. He wasn’t particularly interested in discussing the electric car, nor did he know much about it.
Toyota of course officially has no electric cars. Nor did anyone have a clue, which is funny since they once broke new ground with the Prius. Toyota seems to have lost its pioneering spirit. Only one salesperson had knowledge of electric cars, and that was due to his own personal interest.
A Toyota exec just today said at the Reuters Events Automotive Summit that “it’s not for us to predict which solution is the best or say only this will work” in reference to proposed bans on gas and hybrid vehicles. But actually, Toyota, it is your job to predict which technology will be the best solution, seeing how you make cars and all.
So neither of those dealerships felt like “trusted advisers and copilots.”
BMW is, like Mini, which it owns, headed toward an electric future. How quickly can BMW dealerships adapt? I called the BMW dealership near me, and it currently only has hybrids on the lot (no used i3s). The salesperson I spoke to said they had about 15 pre-orders in for BEVs. He said they’ll receive one demonstration model each of the i4 and the iX in late spring 2022. He told me he currently drives a hybrid and was enthusiastic about switching to fully electric when cars arrive. He had the potential to be a “copilot,” and he was working on achieving “trusted adviser.”
How do you feel about buying an electric car from a dealership? Let us know in the comments below.
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