Car ownership is the foundation of the American dream
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Car ownership is the foundation of the American dream

January 10, 2023
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 Car ownership is the foundation of the American dream

The car is more than just a means of transportation. For many people, the emotional connection with cars begins at an early age. Children draw cars and pretend to be behind the wheel. Teenagers look forward to their 16th birthday to get their driver's license. Many adults talk about the cars they would like to own someday and evoke childhood memories of family road trips.

In short, people of all ages dream about cars.

In addition to the emotional appeal of cars, owning a vehicle is linked to virtually every aspect of a person's life, whether they currently live or aspire to: living where they want to, easily getting to work or school, and earning enough money to raise a family. In Capital One's most recent study on the prospects of buying a car, 87 percent of buyers agreed that owning a car opens up more opportunities.

However, few people can realize their dream of owning a car by simply walking into a dealership and choosing from the newest models on display in the showroom. For most Americans, the affordability of used cars is the best way to obtain ownership.

Whether it is a new or used car, financing is a key factor for many buyers. One survey found that more than four out of five people say they need financing to buy a car. Our automotive business strives to enable more people to own a car so that they can realize their dreams. We have leveraged our technological prowess and worked alongside dealers and consumers to create a simpler, more dynamic and transparent car-buying process.

New ways to buy a car

During the pandemic, consumers accelerated their use of digital tools to improve the buying process, from small purchases like groceries to large purchases like cars and homes. However, during a car purchase, something very interesting happened.

First, dealers quickly embraced digitization, anticipating customers' growing need to access more information online, particularly in the early months of the pandemic when car buyers were unable to shop in person for a while. Dealers invested in innovation and technology, made new advances in creating digital tools, and further opened up the remote shopping experience. This may have contributed to the fact that 40 percent of car buyers said the process was seamless in 2021.

On the other hand, car buyers have become accustomed to using highly sophisticated and transparent digital tools in many other aspects of their online shopping experiences, and the car buying process has not yet reached the same level of innovation. Perhaps this is why, in our latest survey, the number of car buyers who consider the process seamless has dropped to about one in four, and only 3 percent of buyers say they feel comfortable buying a car entirely online. Many people clearly want a hands-on experience when making major purchases in their lives, and often seek an advisor to guide them through the process-and let's not forget that a large majority need financing to do so.

To make these customers feel more comfortable, dealerships need to take the leap and offer an excellent and consistent online and in-person experience. By offering simple digital resources that buyers can access early in their car-buying journey, dealerships can provide an outstanding and seamless experience once they arrive at the dealership.

We at Capital One have recognized this need. We have spent many years transforming our technology product line to create modern, digitized solutions that help both car buyers and dealers. We are proud of the progress we have made and continue to innovate and serve our customers in the channels they want to use.

Keys to the future

Today, perhaps more than ever, car ownership is about freedom: how to spend time, where to feel at home, and where to work. Encouraged in large part by the pandemic, people have moved from urban areas to the suburbs and rural areas. In our March 2022 survey, 42 percent of car buyers said they had recently left urban areas or were planning to do so. But to do so, they must have access to reliable and affordable transportation or a private vehicle.

In all three areas, car ownership is closely linked to improved quality of life:

  • For those who still live near urban areas, many cities have made large investments to provide the necessary infrastructure in the form of public transportation. However, on average over all households, the commute to work is twice as long by public transportation as by private car. This time is a valuable resource that people can use to make significant progress toward their key goals and priorities, including being present with their families.
  • In addition, families who have access to a car can better choose where they live.
  • In addition, car owners are twice as likely to get a job and four times as likely to keep a job as nonowners, and they earn three times as much on average. In fact, 84 percent of low- and middle-income people had to turn down a job because they did not own a car.

One of the keys to unlocking some of these opportunities, including those listed above, is finding the right financing and purchase options that are right for each individual. This is an important purchase in life, where emotion and opportunity go hand in hand, and financing helps to make it happen.

A common destination

It is an outdated cliché to say that car dealers and their customers are at odds, because in reality, quality dealers want to work toward a common goal and thrive with their customers. And let's not forget that quality dealers are vital and enterprising pillars of their communities, often doing their best in surprising ways.

We must recognize that many car buyers still value the in-person experience at a dealership. The easier it is for people to go through this process with information and options, the more people can realize the dream of owning a car and all that it allows.

I am incredibly proud of the way we have leveraged our range of technology products and our deep understanding of the car-buying process to help our customers find the right cars and financing options for them, and there is great potential to do even more. Given the rapid evolution of the automotive industry, institutions like Capital One are in a unique position to help dealers and their customers create a smoother system to enable our businesses to continue to thrive.

1 Low- and middle-income respondents are classified as those reporting an annual household income of more than $25,000 but less than $50,000.

Jonah Collins
Written by
Jonah Collins
Loans, Mortgage
Jonah Collins is a personal loans writer for Empire Finance Pro. Backed by Master's of Science in Finance from Bournemouth University, he has hands-on experience as an investor and trader, along with editing and writing experience in finance, investments.