How Chip Shortages Changed the New Car Buying Journey

For 12 years, the annual Car Buyer Journey Study, conducted by Cox Automotive, has analyzed new and used car buyer survey data to track trends in car shopping behavior over time. In 2021, we found that inventory disruptions have impacted many facets of the new car buying journey. Here’s what our latest study shows.  

The chip shortage affected the new car buying process, but shopper satisfaction remains high. 

Our 2020 study results found that a record-high number of new car buyers were satisfied with their shopping experience, and 2021 satisfaction levels were nearly as high as the prior year. While in 2020 74% of new car shoppers were highly satisfied with the overall shopping experience, that level dropped slightly to 71% in 2021, with overall satisfaction still higher than pre-pandemic levels. Not surprisingly, purchase experience suffered due to inventory frustrations. In addition, inflated vehicle prices caused declining buyer satisfaction on the price paid and trust in the deal.  

So, what motivated car purchases in 2021?  

Due to limited inventory, buyers spent less time in market. For new-car shoppers, time in market dropped from 95 days in 2020 to 91 days in 2021. Many shoppers expressed that they were making their purchases sooner than expected because they feared missing out on the vehicle they were able to find. So what three factors motivated new-car shoppers to move more quickly in 2021?  

• With GDP growth at the highest since 1984, the strong U.S. economy drove purchases. 
• Shoppers were driven to purchase a vehicle for safety and convenience factors. Many believe the intrinsic value of ownership currently outweighs the cost.  
• Buyers were motivated by attractive trade-in offers, which led to the sale of their previous vehicle.  

Digital engagement boosted confidence and satisfaction during inventory shortages.  

Our 2021 findings revealed that higher digital engagement boosted consumers’ confidence in price and overall satisfaction. Consumers highly engaged in the digital retailing process seem to have weathered the impact of limited inventory, and they were more satisfied with the shopping experience and time commitment. This is likely driven by better vehicle selection and less sticker shock in the digital shopping process. So, what can we learn from this segment of shoppers? 

• Mostly digital buyers, meaning they completed more than 50% of their buying journey steps completely online, were more focused during their online search. They spent less time shopping online because they were more concentrated and efficient in their search.  
• Third-party sites were the most relied upon resource for buyers, with nearly 3 out of 4 depending on third-party sites to support them in their purchase process. 
• Due to limited inventory, digital retailing was vital for shoppers who felt economic pressure to make a decision quickly.  

In 2022, digital engagement will continue to influence brand loyalty.  

As the 2021 Cox Automotive Car Buyer Journey Study has shown, economic factors heavily impacted new car shopper satisfaction. For 2022, opportunities remain to rebuild brand loyalty, which eroded due to inventory pressures. OEMs can focus on brand loyalty through: 

• Leveraging digital media to drive brand messaging to near and in-market shoppers.  
  Almost 40% of intenders are willing to wait up to six months for the right vehicle, while about 1/3 of intenders were likely to pre-order their vehicles. It’s a very fluid shopping experience that requires brands to stay engaged, as shoppers may act more quickly than they originally intended.  
• Continuing to transition customers to a more digital experience.  
  As our study showed, digital users tend to be more brand loyal. Instant Cash Offer was the most used trade-in tool among study participants. This is a strong signal that someone is entering the car buying process and the first digital step they could be taking toward researching new vehicle options.  
• Partnering with endemic sites that are crucial to the research and shopping experience.  
  Cox Automotive sites experienced visitor growth in 2021, with a 12% increase in unique visitors and a 17% increase in site visits. With 6 in 10 shoppers relying on Cox Automotive as a part of the car buyer journey, it’s meaningful for dealers to leverage their Cox Automotive site partnerships to maintain brand loyalty with their customers.  

For more insights on what’s coming this year, check out 10 Predictions for 2022: Cox Automotive Looks Ahead Into the New Year.

This blog by Vanessa Ton, Cox Automotive senior intelligence manager, was originally published on Driving Demand, an Autotrader and Kelley Blue Book platform.

Statistics and data based on the following sources and studies:  

• 2021 Cox Automotive Car Buyer Journey Study. 
• Cox Automotive Wave 2 Chip Shortage Research – August 2021