What are the Typical Car Dealership Conversion Rates?


Making a sale is the ultimate goal for car dealerships, and one way to increase the odds of a sale is to follow up on leads. Many businesses zero in on online or website leads. When marketers talk about ‘conversion rates,’ they are typically referring to online traffic or interactions leading to a sale or another action.

The average car dealership conversion rates are around two percent. However, some dealerships boast rates in the double figures. Is it possible for a dealership  to increase its conversion rate? Here’s what to know about converting their interest into action.

Car Dealership Conversion Rates: An Overview

Conversion rates can point to digital success or failure. Marketing campaigns, website traffic and advertising click-throughs all can impact conversion rates. For example, the dealership might initiate a social media marketing campaign that is designed to move more foot traffic into the dealership (thus, ideally boosting sales). 

Website traffic also could lead to consumers reaching out to the sales team online or via email or chat functions. This lead could move the consumer into the dealership to take a test drive or move forward with other aspects of the purchase.

A successful ad campaign is measured by how effectively it boosts traffic to the website or collects leads. Some ads link to a form that allows consumers to provide their information to the dealership. 

The conversion rate measures the success of online initiatives; the success is defined by whether or not the initiative results in a sales lead. These initiatives can vary, but the user must take the next step in the process for the initiative to positively impact the conversion rate.

Car Dealership Conversion Rates

Why Conversion Rates Matter for Car Dealerships

Conversion rates are an important source of data for all businesses because they can reveal the success (or failure) of digital marketing strategies. Ads that aren’t capturing information or that aren’t reaching the correct audience won’t bump up the conversion rate. In addition, a poorly optimized or clumsily designed website won’t keep the interest of visitors or even show up on the radar of major search engines. 

Conversion rates are a means to measure the impact of any outreach or marketing strategy. The outreach, ad or campaign needs to effectively influence the consumer to express interest and reach out to the dealership in some way. The ultimate goal for dealerships is that this lead results in a sale. 

How are Car Dealership Conversion Rates Calculated?

Dealerships might be unsure about their conversion rate. Why is the rate calculated? The site fusionZONE provides an easy formula to uncover the rate: number of leads / traffic X 100.

However, if the dealership is analyzing the conversion rate for ads, they might use different data. For example, the number of lead forms completed divided by the number of ad clicks (times 100). 

Many marketing campaigns are designed to direct traffic to the website. Thus the easiest way to compute the conversion rate is to use the web traffic numbers. 

Factors Affecting Car Dealership Conversion Rates

Dealerships might discover after calculating their conversion rate that their rate is lower than average. What is causing the low conversion rate? There are a few factors that can impact the conversion rate and lead to fewer leads or lower quality leads.

What Impacts the Quality of Leads?

Every marketing strategy and initiative requires a call to action (CTA). This could include visiting the website, completing a form (for more information), visiting the dealership for a special event/promotion, etc. While a consumer might follow-through with the CTA, they might not convert to a sale. 

If few leads convert to a sale, the dealership might feel that the lead quality is lacking. Poor leads could be the result of targeting ads to the wrong audience, lack of customer communication from the sales team or even a tepid CTA. For example, a social media campaign could offer a discount for a customer who offers five referrals. To receive the discount, the consumer might simply pull the information of five friends at random; these individuals might not even be serious buyers or in the market to purchase a car.

Instead of focusing the CTA on a number of referrals, lead quality can be improved by stipulating discounts or other incentives on the referred individual actually making a purchase. While the referrals might be fewer in number, they will be referrals that are more likely to convert to a sale!

If lead quality is lacking, dealerships can review their CTA, their target audience and even their overall message. In addition, the website also could be impacting leads if the design isn’t user friendly or mobile friendly.

The In-Person Shopping Experience

Ads, social media outreach and other marketing communiques could be reeling in leads via website traffic and in-person traffic, too. If quality leads are flopping and not resulting in a sale, what’s happening?

The role of the sales team is important to converting a quality lead into a sale. The culture of the dealership and the sales team could be hampering the success rate. Is the team following up with customers? Are they engaging visitors and assisting them on their car search? 

Customers might feel rushed, they could feel pressured or they might simply feel ignored. If high-quality leads are going nowhere, managers might need to step back and assess the in-store experience.

Car Dealership Conversion Rates

Use These Best Practices for Improving Car Dealership Conversion Rates

The conversion rate is low. Leads aren’t converting to sales. Is the sky falling? Dealerships need to take a step back and realize that low rates don’t have to be doom and gloom. There are strategies for increasing conversion rates and overall sales. It won’t happen overnight, though.

Where do Leads Originate?

To help improve conversion numbers, dealerships need to assess where their leads are originating. If only ads are pulling in leads, it might be time to look at adding different strategies. Initiate social media campaigns, consider adopting a referral program, and audit the website to ensure that it’s user friendly.

Dealerships need to look at their CTA, too. Are dealerships attaching info forms to ads? Are ads or campaigns driving consumers to the website? What does the website provide to customers? Make sure that visitors can easily contact someone via the site; ensure that contact information is simple to find and consider implementing an online chat function.

What resources does the website offer visitors? Remember that many car buyers research online. Provide pricing, details on promotions and pictures that help them understand the car models they are considering.

Some dealerships provide tools for buyers to get pre-qualified for financing online. These financial resources can help simplify the process for at-home shoppers and help them understand what car they can afford on their budget.

Track and Analyze Data

To understand if the conversion rate is falling or rising, dealerships need to pay attention to data. Track ad interactions, leads and website traffic. Regularly assess sales numbers and track how often quality leads are converting to sales.

Optimize, Optimize, Optimize!

Search engine optimization (SEO) can be the difference between high web traffic and low numbers. An optimized website should rank high on Google. Optimize blog content and on-page content, too.

Marketing pros utilize keywords that are part of popular search query terms; these keywords are included organically within content and web pages. When users search for these terms, the website appears in their search results. 

Other factors impact website rankings, though. Google prioritizes quality content and informative content. The search engine’s goal is to provide its users with the best and most informative data related to a search query. Dealerships need to keep in mind that quality content can help boost website visibility. 

In addition, online resources and tools also could help build authority (and improve rankings). Offer customers high-quality photos to help them explore their vehicle options. Some dealerships also include augmented reality experiences. 

Simple solutions also could help improve online visibility and lead to more website visits and leads. Make sure that all contact information for the dealership is consistent across the web–including social media sites. Dealerships also should update and maintain the Google Business Profile. Encourage customers to leave reviews on the profile; in addition, dealerships should respond to those reviews (keep it positive).

Car Dealership Conversion Rates

Relationships Matter

Ads, social media outreach and other marketing tactics can all help increase leads and move inventory. While online conversion rates provide meaningful data that can help dealerships understand what’s working and what isn’t, the power of the in-person experience can still drive or stall the sale. 

Many customers dread buying a car at the dealership. Some might even prefer to handle the entire process online. When all the marketing tactics are working to gather leads but sales are simply not happening, it might be time to assess the culture and in-person sales experience. 

For buyers, a negative dealership experience could make or break the deal. If the sales team is unhappy, the sales data might be nosediving. Dealerships might reassess their processes or culture and even reach out to their team if managers (or dealership leadership) realize that leads are stalling in the showroom.

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