BURLINGTON, Vt. -

One hundred percent of car buyers have to make an insurance decision.

That’s how DealerPolicy president of dealer solutions Mike Burgiss wanted to start the discussion in an interview with Auto Remarketing. During the conversation, Burgiss talked about a new DealerPolicy study on insurance and the car dealership.

DealerPolicy’s “2019 Car Buyer Study: The Role of Insurance in the Modern Dealership” shows that 83% of car buyers would prefer to handle everything related to their car purchase while at the dealership, including insurance.

“It’s an overwhelming number,” Burgiss said in the Auto Remarketing interview.

Another overwhelming number according to the survey: Four out of five respondents would use the cost savings from buying insurance at the dealership to invest in a nicer vehicle or more F&I products.

In a news release accompanying the study, Burgiss said dealers have traditionally seen insurance as a problem.

“But insurance is now a new income opportunity for dealers,” Burgiss said.

Expanding on that in the Auto Remarketing interview, Burgiss said customers “have to put that new car on their insurance somehow.”

The customer is “already required to make an insurance decision,” he said. “And they’re required to do that right before they get to the dealership, while they are at the dealership, or right when they get home,” he said.

Burgiss also pointed to a separate study from Driving Today showing that 80% of customers are paying too much for their car insurance.

“So when you take a situation where 100% of people have to make a decision, and they’re already going to make a change, and they’re paying too much, then what you want to do is help them make a good decision at that time,” Burgiss said.

Many want insurance help at the dealership; few are getting it

Expanding on the DealerPolicy study statistic showing that 83% of customers want to finish everything at the dealership, including insurance, Burgiss said very few people are getting help from their dealer in that area.

He wanted to be clear that the DealerPolicy study, which is based on a survey of 1,000 consumers who purchased a car within the past six months, is not talking about dealers selling insurance. Dealers who are not licensed agents are not allowed to sell insurance, he said. Help from the dealer, in this case, would mean the dealer introducing the customer to a licensed agent, he said.

DealerPolicy said that two industry trends “set the stage for the study.” One of those is that dealers are seeing a steady decline in new car sale profit margins. The role of insurance is the second trend.

“Today’s dealers can add enormous value to the car-buying experience by providing customers transparency and choice for their insurance needs when and where they want it,” DealerPolicy wrote in the study.

Additional key findings of the study: Seventy-nine percent of buyers indicated they would like to see competing insurance quotes while at the dealership. And 59% of buyers simply update their existing policy rather than research new carriers or search for more competitive pricing.

Lessons and takeaways

The study included quotes from anonymous buyers about purchasing insurance from a dealership.

“This would help me get my insurance set up quickly and save money all while buying my car,” one buyer said. “It’s a great idea.”

“It would enable me to go ahead and purchase insurance for the vehicle before leaving the lot,” said another.

The study concluded with “lessons and takeaways,” with one stating that “the overwhelming majority of buyers want to consolidate the insurance and car-buying process into a single experience.”

And buyers said they like to spend their insurance savings at the dealership.

“When customers are able to save money on their insurance before they leave the showroom, they have more budget to spend on their new car,” the study states. “Study participants stated overwhelmingly that they would take these savings and spend them at the dealership on a nicer car, warranties, or other F&I products.”

Burgiss said DealerPolicy conducted the study because insurance is a new part of the retail experience at the dealership that he said has not been the subject of much research in the past.

“We know from our experience that consumers really do engage in the process very readily,” he said. “They’re ready for insurance, and we know that educating dealers and their teams on the willingness of car buyers to engage in the retail process with insurance, it helps them see insurance as an opportunity instead of seeing insurance as another problem they have to solve. When I say insurance as an opportunity, it’s an income opportunity.”

Burgiss again emphasized the importance of the portion of the study showing that four out of five survey respondents would use the cost savings on insurance to invest in a nicer vehicle or more F&I products.

“The evidence is just overwhelming that you should put insurance in your retail process,” he said.