Transparency can go a long way to making customers enjoy their car-buying experience, according to a new survey from the TrueCar Buyer Study.
Consumers believe that auto dealers’ profits on new car sales are almost five times higher than they actually are.
TrueCar found that consumers believe the dealer makes about a 20% profit on a $30,000 car, when in reality dealers made about 3.8% profit on the sale of a new car in 2013, according to data from the National Automobile Dealer Association.
The survey, conducted in February, polled more than 3,000 consumers across the U.S., and was commissioned by TrueCar to study consumer perceptions regarding profits earned in the car-buying experience.
On average, participants believed that about 10% to 12% would be a fair profit margin on the sale of a new car, and that if dealers made 0% profit on new car sales, they would be willing to pay an extra 8% on top of each purchase, as a tip.
“If consumers believed that they were getting information that they could trust as part of a more transparent process, they would be willing to pay dealers more,” Scott Painter, TrueCar founder and CEO, said in a press release. “These survey results are consistent with the idea that increased transparency in the car-buying process can result in higher margins for dealers and greater consumer satisfaction. With upfront and transparent information, everyone wins.”
The survey also found that about 26% of car buyers felt they had overpaid for their purchase and that 32% of car buyers said that they would not return to the same dealership due to low customer satisfaction with the purchase process.
TrueCar.com is an online platform that promotes a negotiation-free, car-buying experience.
We’ll have transparency with consumers AFTER we have transparency between Dealers and their employees.
Can anyone tell me why some people think it is necessary to disclose proprietary information just because someone told them they need to be “transparent?” There is “relative transparency” and “perception of transparency.” If you want to be truly transparent, disclose your triple net cost and negotiate or quote the margin. See how that works. See how readily your customer will pay you a 10% transaction gross profit by being “transparent.” The 10% doesn’t sound so bad to them until they figure out its $3000.00.
Using the term “transparency” discredits us. We aren’t being transparent and customers don’t believe our claims. Hell, we don’t even believe our own claims. We know its just another strategy to make money, something we don’t need to apologize for.