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I would like to know what is the average length of time a consumer spends buying a car.
Hello! Thanks for your question about the average length of time that consumers spend in the process of buying a car. The short version is that customers currently spend, on average, 14:44 hours in the buying process. The majority of that time is spent conducting research online. Below you will find a deep dive of my findings.
METHODOLOGY AND FINDINGS
In researching this issue for you, our team reviewed multiple sources, including industry reports, corporate websites, trusted media reports, user forums and review sites. We first explored information concerning the manner in which consumers now go about the process of buying a new car, and then concentrated upon the raw data associated with that process. We also researched industry and corporate websites in an effort to find specific examples of the time spent on purchasing various makes of automobiles.
THE CHANGING CONSUMER BUYING HABITS
It will come as no surprise that the buying habits of consumers are changing when it comes to new car purchases. P reviously, consumers entered the marketplace with a fairly developed idea of the type of vehicle they wanted, along with the brands they would consider. From there, they moved on to visit dealerships where they negotiated and compared prices. Ultimately, the vehicle would then be purchased and the process concluded.
Over the recent years, this process has begun to change. More consumers are now open to considering a wider range of vehicle makes. In a 2013 study by New Autoshopper, 50% of consumers said that they were open to any make of vehicle when they began their searches. They then changed their minds about the vehicle(s) that they wanted, after which they eventually settled upon one make and/or model. They then visited the dealerships that provided the product in which they were interested. A majority (between 58% and 71%) of today's consumers, however, visit no more than two dealerships before they purchase a new vehicle.
Studies show that only 17% of consumers surveyed like the traditional way in which they purchase vehicles. The Internet has helped change that by markedly changing the way in which people buy cars. Today's consumers tend to initiate the process online, and they spend more time in online shopping than they do offline. When they go online, 83% of consumers get their information from dealer websites, though this may be changing. Interestingly, consumers do get information from professional and consumer review sites, but only at 62% and 57% respectively, evidencing the continued importance of dealerships in this process.
The importance of the Internet in the car-buying process cannot be understated. In a recent Accenture survey, 75% of consumers indicated that they are now open to using only the Internet for the entire process of buying a car. 72% would prefer to handle the financial side of the process entirely online. And unlike pre-Internet buying, the relationship between the customer and the dealership now continues after the purchase is completed.
TIME SPENT IN MARKET
Recent studies give us more insight into how the buying process takes place in today's marketplace. The most recent study (conducted by DealerRefresh) suggests that 48% of buyers shop between 1 and 3 months before deciding on their purchase; 83% conduct on line research before their purchase. Unfortunately, the details of this study are not available, so I cannot tell you, for example, how many hours the surveyed buyers spent in actual pre-purchase shopping. Thus, it is entirely possible that, while the shopping experience may take up to 3 months, the actual hours spent are significantly less. This would likely account for the discrepancy in the results shown in this study and the following study conducted by Autotrader/KBB.
The DealerRefresh study is somewhat contradicted by a 2015 Autotrader/KBB study which found that among all buyers, the average time spent in market was 14:44 hours -- 59% of that time was spent in online research and shopping -- 21% of the time was spent at the dealership. New car buyers spent less (13:01 hours), while used car buyers spent more time (15:22 hours) in the buying process. Sixty percent of buyers continue to be open to considering multiple makes and/or models of vehicles when they begin the buying process. According to this study, 3rd party websites are now the preferred place from which all buyers obtain most of their information. Among all buyers, 60% of the time spent online during this process is spent on 3rd party websites. (This study is more recent than the NADA study that found higher loyalty to dealerships, as opposed to 3rd party websites.) In considering various aspects of the purchasing experience, the Autotrader/KBB study also found that, among consumers, the least-liked aspect was the length of time it took to complete the purchasing process.
There is some data available that tells us what the average buying time in today's market is on a monthly basis. The data is somewhat dated, but it is the most recent that we could find and I wanted to provide it for you, in hopes that it will be of use. According to a 2008 article in the Automotive Dealers Network, the number of days spent in the buying cycle varies according to the month. The shortest time spent is 7.7 days (October) and the longest is 22 days (December). On average, the number of days spent after "submitting a lead was 10.9 days."
A 2014 study by Deloitte looked at the purchasing process according to generation. It focused on Gen Y (a/k/a Millennials) consumers and found that 52% of them spend over 10 hours researching vehicles. Seventy-nine percent of Gen Y buyers consider more than 2 vehicles. Gen Y also relies more heavily upon review websites (70%) than do other generations (59%).
Once Gen Y has decided upon the make/model of vehicle that they want, the actual time spent in the dealerships is as follows: (1) 40 minutes getting information, (2) 33 minutes "waiting to test drive a vehicle," (3) 41 minutes spent processing paperwork, (4) 41 minutes dealing with financing issues, and (5) 47 minutes waiting for basic vehicle maintenance to be completed.
Adding these time segments together gives us a total of 202 minutes, or 202 minutes/60 minutes per hour = 3.4 hours. When the time spent in the dealerships is added to the roughly 10 hours spent in online research, the result is quite close to the overall 14:44 hours reported by the Autotrader/KBB study.
TWO EXAMPLES OF LIMITING PURCHASING TIME
We found publicly available data on the time spent in market for the various automotive brands to be unavailable. However, we did find some information on the time spent on purchasing a vehicle when using systems offered by two national companies. Both companies are taking steps to dramatically reduce the buying time experienced by their customers. Sonic Automotive is a national company that provides a sales process that is used by individual dealers. It claims that it has reduced to 45 minutes the time spent on processing paperwork. In the article discussing this strategy, the author visited a Toyota dealership in Charlotte, NC that uses the Sonic system. He then purported to be interested in buying a new car to ascertain exactly how long it would take to purchase a vehicle from them. He did this without revealing that he was from Edmunds. He reports that the entire process took him under an hour, after which he revealed his true identity to the salesman.
AutoNation is a national retailer that has a digital storefront. The company allows its customers to purchase a specific new (or used) vehicle online. They do so at a fixed price and the vehicle is reserved for 48 hours. AutoNation claims that the paperwork in purchasing a vehicle has been reduced in their system to less than 30 minutes.
CONCLUSION
To wrap it up, available data suggests that the time spent in market by automobile consumers is just under 15 hours. Most of the time spent occurs online, prior to the customer visiting the dealership of choice.
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