Dealers have an underleveraged opportunity to impact customer loyalty and satisfaction, as well as their own bottom lines.
How can they take advantage of the opportunity? By integrating insurance into the sales process.
According to a new study from insurance marketplace DealerPolicy, which surveyed 300 dealership executives and 1,000 consumers who purchased a vehicle in the past six months, both of those categories of respondents agreed that insurance was a necessary part of the buying process.
However, their sentiments differed strongly in the areas of accessibility, transparency and the convenience of auto insurance.
DealerPolicy chief executive officer Travis Fitzgerald said dealers and buyers view auto insurance as inseparable from the car buying process. But DealerPolicy more recently examined where the disconnect occurs.
“The results were astonishing,” Fitzgerald said in a news release.
He continued, “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 in areas such as affordability and spending power, actual versus perceived cost of insurance, assistance with and access to insurance options at time of sale, interest in using a real-time policy-bound digital insurance option at time of purchase, and potential revenue opportunities.
DealerPolicy analysts learned that car buyers believe an integrated insurance option that revealed potential savings would benefit them. Sixty-nine percent of the buyer respondents would likely buy a nicer car, and 64% would likely add on F&I protection products. DealerPolicy said that could bring more revenue opportunities for dealerships.
However, only 16% of dealers had a franchised insurance agent on site, and only 19% connected the car buyer to an agent via phone.
Another key finding of the report is that although 93% of dealers say they helped the customer with insurance, 49% of customers report dealers did nothing to help.
DealerPolicy said it was not surprised to see that 49% of car buyers believe dealers did not assist with insurance at time of purchase, which the company said results in 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,” Fitzgerald said. “And now, our latest study supports the original hypothesis we had.”
Another key finding of the report is that the current sales process doesn’t work. Ninety percent of dealers think insurance could negatively impact their selling opportunity, but 71% of customers would like insurance information at time of purchase. In addition, more than 60% would use those savings to buy a nicer car or F&I products.
The Automotive Retail & Auto Insurance Trends for 2021 study is part one of DealerPolicy’s two-part study. The second half, coming in early 2021, shows misconceptions and myths around digital auto insurance.
Source : AutoFinanceNews
