Why Dealers Don't Understand Buyers' Needs originally appeared on Autoblog.
Despite lip service, surveys show dealers still don’t share the same concerns as their customers
If you thought that car dealers didn’t truly understand current consumer sentiment, that gap is only growing. That’s the finding of an Urban Science/Harris Poll of 254 original equipment manufacturer (OEM) car dealers and 3,026 U.S. car customers who own or lease a vehicle, or intend to within 12 months. The poll was conducted mostly in January 2025, but includes a follow-up study to evaluate how attitudes have changed since new policies were put into place by the Trump Administration.
A growing EV perception gap
The study finds that automakers' commitment to producing electric vehicles (EVs) and the resulting promises of increased dealer revenue are causing their retailers to embrace EVs. The Urban Science/Harris Poll’s finding of dealer optimism mirrors that of Cox Automotive’s report that dealers remain optimistic about EVs, although that optimism stems from the continuing impact of the federal EV tax credit, which totals $7,500 federal tax credit for new EVs and $4,000 credit for used EVs. Such optimism will likely continue even after the ending of the federal tax credit for EVs on September 30, 2025.
This contrasts with car buyers, who remain increasingly wary of EVs. Just a small percentage claim that EVs meet their needs, according to the Urban Science/Harris Poll. This echoes an American Automobile Association survey in June 2025 that found only 16% of respondents saying they were “very likely” or “likely” to buy an EV as their next car, the lowest percentage since 2019 and down 2% from 2024.
Consumers’ increasing disinterest in EVs is reflected in June’s sales results, as EV demand dropped 1.4% from May, and is down 3.5% year-over-year according to Cox Automotive. Similarly, used EV sales declined 7.5% month over month in June. Such declines are almost certain later this year when the federal tax credit ends, but that's only part of the perception gap between automotive retailers and their customers.
Buying a car remains a nightmare
Of course, consumers dread buying a car, mostly because of the dealer experience. It’s hardly a secret, yet 61% of dealers strongly agree the model is optimized for the future. Car buyers aren’t nearly as enthralled, with just 37% of auto buyers agreeing. That’s up 13% from last year, according to the Urban Science/Harris Poll, but nine in 10 auto buyers would consider purchasing from a traditional dealership, compared to only 52% who would buy from an online retailer like CarMax or Carvana.
Nevertheless, 94% of dealers view Tesla or Rivian’s direct-to-consumer sales model as a threat, and with good reason. Around 64% of consumers find direct sales appealing thanks to its transparent pricing, ability to customize their vehicle, and the avoidance of any price negotiation. If buyers have any hesitation, it stems from the inability to test drive and concerns over post-purchase servicing.
Further alienating auto buyers from traditional dealers is the use of artificial intelligence (AI). 90% of dealers either already use or plan to implement it for sales tracking, post-sales service, inventory management, customer targeting, and website chatbots. Of the retailers who are using AI, slightly more than half say it has helped them achieve higher sales. However, consumers are becoming less enthralled, primarily due to AI’s tendency to provide misinformation and its lack of transparency.
It still comes down to price
No matter how good or bad the buying experience, it all comes down to a vehicle’s price. For most consumers, that remains a big concern, with 64% worrying about a vehicle’s affordability. It’s also a concern among 40% of dealers, yet 52% of car buyers are also worried about the cost of insurance, while 47% are concerned about maintenance costs. All three outrank the cost of gasoline, which worries 44% of buyers.
Affordability only concerns four in ten dealers, with an equal number concerned about external cost factors. Even fewer (37%) are concerned about the cost of insurance. Given consumer reluctance to embrace EVs, it’s little surprise that only 16% of buyers are concerned about the ongoing availability of government EV subsidies, a concern among 33% of dealers, who view it as an incentive to help move cars.
Final thoughts
While dealers might think they are providing the very best sales and service experience possible, and the best retailers in the business no doubt are, multiple studies prove that dealers aren’t sensitive to the issues affecting their buyers. The negativity built up by dealers over decades in response to shady sales and service practices isn’t so easily dissipated, and the push for direct-to-consumer sales is the result. New manufacturers wouldn’t push for a new sales model if the old model worked so well, or wasn’t abused by those who are a part of it. Consumer distrust of car dealers, which remains a part of the car-buying process, is something the industry has earned over the past century, and it could take just as long to change.
Why Dealers Don't Understand Buyers' Needs first appeared on Autoblog on Aug 7, 2025
This story was originally reported by Autoblog on Aug 7, 2025, where it first appeared.
Comments