InsuranceLecturer — The car buying experience is changing. Buyers spend more time researching vehicles and going through the steps of the buying process online than shopping in the marketplace or visiting the dealership.
This has significantly changed the in-store experience. Today, that experience is more transaction-focused than ever, and therefore includes other aspects of car ownership: financing, warranties and aftermarket products, and other options.
We can start thinking of this experience as an all-inclusive resort; a customer shows up for the vacation, or in this case the vehicle, and the dealer takes care of all aspects of the car buying experience, for an all-inclusive price.
And even though dealerships are acting like all-inclusive resort managers by incorporating other aspects of car ownership into the car-buying process, too many dealerships cling to prior conceptions on an option.
That could cost them extra dollars: insurance. It’s an all-too-common belief that car buyers who know how much car insurance for their new vehicle costs will spend less at best or walk away empty-handed at worst.
That’s just not the case – at least not anymore. In a recent study commissioned by Polly, 65% of car buyers said they consider the price of car insurance when buying a car, and 72% said they would like the option to take out car insurance at the dealership.
Buyers today arrive at the dealership having researched not only the vehicle they wish to purchase, but also trade-in options, financing options and, yes, even the price of insurance. They know their “all-in” monthly budget before they even set foot on the pitch, and they’re just there to close the deal.
In that same 2022 Polly study, we found that total cost of ownership continues to be a priority for consumers, with over 86% saying it was important to them.
As buyers become more knowledgeable, their insurance research is often more of a guess than an actual quote, or they only received one quote from their current provider.
These buyers have an all-inclusive monthly cost in mind, and they’ve calculated how much they can spend on the vehicle with a ballpark insurance estimate, leaving room for dealerships that offer access to an insurance market during the car buying experience to open buyers’ eyes to alternative options that could save them money.
And, for dealerships, integrating an insurance market during the sales process can have an unintended effect: buyers could spend more money with the dealership.
In some cases, markets can save car buyers a few dollars, but in many cases the savings can run into the hundreds per year. It could also increase the amount the buyer spends at the dealership on what matters most to the dealership: the car!
Just as car buyers are no longer loyal to dealerships, these same car buyers are no longer loyal to their insurers. Insurance marketplaces integrated into the car buying experience provide buyers with competitive prices for comprehensive insurance.
When shopper’s eyes are opened to how much they can save on the same coverage they’re already paying too much for, they often spend those savings on a more expensive car, greater warranty coverage, or more aftermarket products. the dealer.
Although they’ll probably spend the same all-inclusive monthly amount, dealers will get a bigger margin and customers will walk away happier, not only feeling like they got a better deal, but appreciating the time saved in n not having to deal with insurance details after the fact. It’s a win for everyone.