Money back guarantees replacing test drives for many buyers

The latest consumer research from Auto Trader reveals that whilst 72% of car buyers would not consider making a purchase without a test drive, nearly two thirds (62%) would be open to buying a car without one if they are offered 14-day money-back guarantee.

Following the reopening of physical forecourts earlier this month, the market has quickly returned to strength, with most retailers trading at over 30%[1] up over the same period in 2019 during the week of 12th April. This huge demand is reflected in the increased traffic to the Auto Trader marketplace, which last week saw cross-platform visits increase 40% versus 2019. Further highlighting the current strength of the market, the average price of a used car increased 5.8% last week on a year-on-year and like-for-like basis, accelerating on the 5.7% growth recorded the prior week.

The research, which was conducted in April, highlights that a significant proportion of buyers continue to look for online retailing services. In fact, whilst the appetite for forecourt transactions remain, nearly a quarter (23%) of car buyers would prefer an online experience, either completing the purchase online and having the vehicle delivered to their home (14%), or alternatively, collected from a pick-up point (9%).

As well as the opportunity to make the online retailing experience more attractive to more car buyers, the research reveals that how test drives are conducted is set to evolve significantly. In fact, nearly three quarters will be conducted differently in the future to meet changing consumer expectations: out of the 1,900 people surveyed, 30% said their preference was for an unaccompanied test drive at the dealership, whilst 41% would rather conduct theirs off-site completely.

Of those who prefer to test drive away from the dealership – 21% would like theirs to take place from home, and one in five (20%) favour an extended testing period – 70% would be happy to pay a small fee to do so if it was paid back upon purchase. Similarly, the research also revealed more than half (58%) of consumers would be willing to pay a deposit to reserve the car of their choice in order to safeguard it from other potential buyers.

Commenting on the research, Auto Trader’s director of data and insight, Richard Walker, said: “Based on the anecdotal feedback we’ve been receiving from many of our retailer partners over the last few weeks, the huge levels of demand we’re tracking in the market will come as little surprise. However, this research does highlight the opportunities for retailers to capture a greater share of demand by adapting their processes in line with evolving consumer preferences.

“Many buyers are now happy to purchase without a test drive if a money-back guarantee is in place. This is another example of the traditional barriers to buying online being removed for consumers with improved services offered by retailers. The old test drive format is no longer fit for purpose, with consumers demonstrating a clear preference for either unaccompanied or extended at-home test drives.”

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