Why dealerships should create a smooth auto insurance process

Buying a vehicle is one of the most painful events that many consumers experience.

Year over year, the number of dealership visits and the time spent at dealerships has dropped. Is it any surprise that 60 percent of buyers say the shopping experience hasn't improved from previous purchases? I think we can all agree that rethinking the traditional dealership experience is more important than ever.

So how do dealerships change people's perception of the antiquated model? Every pain point must be considered. One glaring hiccup in the process: vehicle insurance. Not only do customers end up springing for a vehicle with a huge monthly payment, but their insurance rates end up being sky-high.

How did we get to this point? Until now, dealers have had zero ability to supply customers with frictionless, forward-thinking insurance coverage. They are unable to offer insurance for simple sales and leases. Dealerships offer service contracts for things such as wheel protection and dent removal. But consumers walking into dealerships looking to buy or lease a vehicle need to have a separate conversation outside the dealerships to get insurance.

Organizing insurance is often an afterthought that results in a painful realization of added cost. There's an opportunity for dealerships to build an insurance component into checkout, enabling customers to shop for a great rate on-site and allow dealerships to lock in financing on the spot. Essentially, dealers would hit one button to send all vehicle, credit and payment info, and customers would walk out the door with seamless coverage. The goal? Negotiating insurance instantly to reduce the time spent at dealerships and improve the car-buying experience, keeping customers coming back.

I know what you're thinking: "Aren't there legal barriers to providing such services?" Rest assured, these barriers are removed because the dealer isn't acting as the agent. The consumer would be signing a separate agreement with payment terms outside of the vehicle purchase, which is no different from a dealer giving up operational space in the dealership to house an insurance agent.

And while historically we've seen insurance sales offices within dealerships, there hasn't been much evolution in the practice. Insurance agents aren't a part of the purchase process. They are merely an alternative for first-time buyers or customers who are unhappy with their previous coverage. Considering that the average buyer takes about four hours to purchase a vehicle, it seems unlikely that the consumer would be willing to spend another hour or two meeting with a separate insurance agent after the purchase. I wouldn't call it painless by any stretch of the imagination.

Suffice it to say, dealers will have to try harder than ever to create a frictionless customer experience in the current landscape. By addressing pain points and offering streamlined insurance policies, they'll create a better customer experience. A smooth, seamless insurance process will be a key differentiator; it comes down to ease.

Dealerships that evolve and adapt will undoubtedly come out on top. Those that don't will be stuck in the slow lane, continually passed by a steady stream of forward-thinking insurance models.