Car ownership is the foundation of the American dream

Cars are 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.

Aside from the emotional appeal of cars, owning a car is linked to virtually every aspect of a person's life, whether they live in it now or aspire to live in it: living where they want to live, getting to work or school easily, and earning enough to start a family. In Capital One's latest 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 the dream of owning a car simply by walking into a dealership and choosing from the latest models on display in the showroom. For most Americans, the convenience of used cars is the best path to ownership.

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

New ways to buy a car

During the pandemic, consumers have accelerated their use of digital tools to improve the buying process, from small purchases like groceries to large purchases like cars and homes. However, when it comes to buying a car, something very interesting has 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 some time. Dealers invested in innovation and technology, making new advances in creating digital tools and further opening up the remote shopping experience. Perhaps this explains why 40 percent of car buyers said the process went smoothly 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, and the process of buying a car has yet to achieve the same level of innovation. Perhaps this is why, in our latest survey, the number of car buyers who consider the process transparent has dropped to about one in four, and only 3 percent of buyers say they feel comfortable buying a car entirely online. It is clear that many people want a hands-on experience when making major purchases in their lives and often seek an advisor to guide them through the process, not to mention that a large majority need financing to do so.

To make these customers feel more comfortable, dealers need to go a step further 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, dealers can provide an exceptional 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 portfolio to create modern, digitized solutions that help both buyers and dealers. We are proud of the progress we have made and continue to innovate and serve our customers on the channels they want to use.

Keys to the future

Today, perhaps more than ever, car ownership is about freedom: how to spend your 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 need 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 significant investments to provide the necessary infrastructure in the form of public transportation. However, on average, for all households, the commute between home and work takes 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 main 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, those who own a car are twice as likely to get a job and four times as likely to keep a job as those who do not own a car, and earn on average three times as much. In fact, 84 percent of people with low or middle incomes 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 makes it possible.

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 get information and options, the more people will 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 that will allow our businesses to continue to thrive.

Low- and middle-income respondents are those who report an annual household income above $25,000 and below $50,000.

Written by

Jonah Collins

Loans, Mortgage

Jonah Collins is a personal loans writer for Finwower. 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.

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