Cox Automotive Industry Report - April 29, 2022

CAR BUYERS REPORT HIGHER SATISFACTION WHEN USING DIGITAL FINANCING TOOLS, COX AUTOMOTIVE STUDY SHOWS

Though only 29% of buyers applied for financing online for their most recent vehicle purchase, 96% of those surveyed are willing to do so, according to a new study published today by Cox Automotive. The Cox Automotive Car Buyer Financing Journey Study revealed that buyers who completed key financing steps online saved time and were more satisfied with their time at the dealership than buyers who completed the same steps in person.
 
Cox Automotive has been researching the car-buying process for 12 years and, with the release of this new study, is diving into the financing aspect of the car buying process for the first time. The new Cox Automotive Car Buyer Financing Journey Study explores the steps of the financing journey and measures consumers’ satisfaction with the overall vehicle financing process.
 
Read the press release to learn the five takeaways from the study and download the study highlights. Findings will also be highlighted in an American Financial Services Association (AFSA) Business Partner Webinar, Vehicle Financing in the Era of the Digital Consumer, on Thursday, May 26, at 2 p.m. EDT. Andy Mayers, lender solutions strategist and associate vice president of operations at Cox Automotive, will be joined by Senior Research Manager Angela Drake to delve into consumers’ buying/financing psyche and how lenders can prepare for fully eCommerce auto retailing. 

MARKET INDICATORS ARE MIXED SO FAR IN APRIL

Using Dealertrack data, Cox Automotive Chief Economist Jonathan Smoke estimates that new retail sales gained momentum slightly last week while used retail sales lost momentum.
 
Meanwhile, wholesale prices have increased in each of the last six weeks; however, retail has yet to follow and may not, Smoke notes.
 
Tax refund critical mass has finally been achieved, with 60% of projected refunds issued. However, refund volume remains well behind past years. In 2019, 94% of tax refunds were issued by this same week. However, the average refund is at the highest average ever recorded at this stage in tax refund season.

Read the Auto Market Weekly Summary and watch the Auto Market Report video for more data and insights from Smoke that provide a holistic view of the auto industry.

ELECTRIFIED TRUCKS ATTRACT A NEW KIND OF BUYER, COX AUTOMOTIVE RESEARCH SHOWS

More than a dozen automakers are introducing electrified pickup trucks – full EVs or hybrids – over the next couple of years. One of those is Ford, which will celebrate the delivery of the electric F-150 Lightning to its first customers today, April 26.
 
With so many electrified pickup trucks hitting the market, the question is who will buy them. Will it be traditional pickup truck owners, or will electrification open a new segment of truck buyers?
 
Here’s a look at the research findings. 

CAR BUYERS BALK AT PAYING MONTHLY FEES FOR FEATURES AND SERVICES
 

Automakers have announced ambitious plans to generate billions in revenue by charging car buyers extra on an annual or monthly subscription basis for some in-car features, services and upgrades. Their plans beg the question: Are customers willing to pay?

The answer is not all good news for the automakers, according to a survey by Cox Automotive, but reveals an opportunity for them to influence consumers’ attitudes toward software subscriptions.  

Read the Data Point for research findings. 

DEALERSHIP SERVICE ACTIVITY AND REVENUE INCREASED IN MARCH, ACCORDING TO XTIME METRICS

Both service activity and service revenue increased at U.S. franchised dealerships in March, according to the latest Cox Automotive analysis of Xtime metrics. The Repair Order Volume Index increased month over month to its highest level since July 2021. The Repair Order Revenue Index increased month over month as well, setting a new record-high for the index, dating back to January 2018.
 
“The overall trend line indicates revenue per repair order has taken a step change since the COVID-19 pandemic hit the auto industry, with each repair order generating more revenue for our franchised dealers and ultimately helping support profitability,” said Skyler Chadwick, director of sales engineers at Xtime. “As of March, each repair order generates $512 in revenue on average, a 25% increase over the pre-pandemic average.”
 
Check out the Data Point for additional statistics.

10 TAKEAWAYS FROM U.S. AUTO SALES: Q1 2022

New-vehicle sales last quarter came in at 3.3 million, according to the latest Kelley Blue Book counts, a drop from 3.9 million in the first quarter of 2021. Sales in the quarter were down 15.7% year over year, but as the Cox Automotive Industry Insights team has repeatedly stated: There is NOT a demand problem in the market.

Despite record-high transaction prices, there are plenty of interested and able buyers out there. There is a growing interest in electric vehicles (EVs) too, and increasing availability of good products. EV sales grew 76% year over year in Q1, in line with our January prediction for EV growth to outpace industry growth in 2022. EV share jumped from 2.5% of sales in Q1 2021 to 5.2% in Q1 2022.
 
Read the details published last week, and download the Q1 light-vehicle sales report and the Q1 electrified light-vehicle sales report.