Are traditional car dealerships becoming less relevant in this era of digital disruption?

Not according to the latest study conducted by Urban Science and The Harris Poll.

The 2024 Urban Science Dealership Transformation Index polled 3,005 U.S. car buyers in three “key dimensions” — dealer relevance, trend resistance and actions — to measure customer perception of dealers.

The study also surveyed 250 franchise dealers to compare their views with those of their customers.

The results show the dealership’s importance is rising, as measured on a 100-point scale called the DTI score.

Scores less than 45 are considered “critical”, 45-54 is “weak”, 55-64 is “average”, 65-74 is “strong” and 75 or more is “resilient”.

The overall score — an average of the three categories — was 56, up one point from the 2023 study. Urban Science said that positive progression “promotes consideration, trial and positive customer interactions, fostering short- and long-term service and sales loyalty, and in turn business relationships that promote healthy dealerships and retail networks.”

The relevance score rose two points year-over-year to 62, edging closer to the “strong” range. Most significantly, that score took a giant lap among the youngest consumers in the survey (Generation Z) soaring seven points to a strong 67, indicating “a growing openness to dealer guidance as this cohort continues to gain purchasing power.”

Specifically, 51% of Gen Z car buyers strongly agreed today’s dealers provide the resources, tools and tech to make buying a vehicle easy and convenient, an increase of 19 percentage points, and 46% believe dealers play an essential role in the car-buying journey, a 14-point jump.

Overall, 43% of auto buyers strongly agreed dealers play an essential role in the new-car-buying journey, up four points, while 74% of dealers strongly agreed, marking a 31-percentage point gap.

In addition, 38% of car buyers strongly agreed traditional dealerships are optimized for the future, an 11-point increase from 2023, as did 48% of dealers, up 17 points.

The action score, which describes what auto buyers are doing or considering regarding vehicle purchases, rose one point to 54, and the survey results showed car buyers of all generations still overwhelmingly prefer traditional in-person purchasing over other options, though non-traditional dealerships gained five percentage points over 2023.

Asked which buying format they would consider, 91% selected in person at a traditional dealership, followed by fully online from a dealership website (67%), fully online from an OEM website (59%), and non-traditional dealership (57%).

As to where they’re considering buying from, manufacturers’ dealerships led with 80%, ahead of independent used dealerships (35%) and national used dealerships such as CarMax and Carvana at 32%, up seven points YOY.

The survey showed electric vehicle owners (58%) are twice as likely as gas vehicle owners (29%) to strongly agree they are open to purchasing a vehicle fully online.

The overall trend resistance score, which measures car buyers’ reluctance to try new innovations in automotive retail, fell one point to 52, which Urban Science said “signals a change in auto-buyer behavior toward embracing digital platforms and shared mobility options.”

The survey found 33% of auto buyers strongly agreed they are open to purchasing a vehicle fully online from vehicle selection through contracting/purchasing (up three points), with millennials leading the way at 46%, followed by Gen Z (38%), and 20% strongly agreed owning a personal vehicle is not as important as it used to be, an increase of four percentage points Urban Science called “significant.”

Regarding EVs, 47% said dealers are keeping up on understanding and advising on the EV market. Boomers had the strongest agreement at 58% and millennials (34%) the weakest.