PayJunction Survey Finds Car Owners Prefer Payment Choice Over Changing Dealerships
PayJunction, a technology-focused payments company, has released new research examining how consumers respond to credit card surcharges at automotive dealerships. The survey indicates that while additional fees may influence how customers choose to pay, they are less likely to influence which dealership they choose.
The findings point to an important opportunity for dealerships facing rising payment acceptance costs. Rather than treating surcharges as a potential threat to customer loyalty, dealerships may be able to preserve relationships by giving consumers multiple ways to complete a transaction. Credit cards, debit cards, cash, checks, ACH payments and installment financing can provide customers with alternatives based on their individual financial preferences.
According to the survey, 71% of respondents either strongly or somewhat agreed that a credit card surcharge would not affect the dealership they choose. Meanwhile, more than half of respondents said they would consider changing their payment method to cash, debit or check when faced with a surcharge.
For routine maintenance, 51% said they would consider using an alternative payment method if a surcharge were applied. The figure was 49% for vehicle repairs. The results suggest that consumers may be willing to change how they pay rather than change where they purchase automotive services.
Payment Choice Can Influence the Customer Experience
The automotive service experience increasingly extends beyond the vehicle itself. For customers, the way they pay for maintenance and repairs can be an important part of the overall dealership experience.
Vehicle maintenance and repair expenses can vary significantly. Routine services such as oil changes, tire work, inspections and scheduled maintenance may represent relatively predictable expenses, while mechanical repairs can become considerably more expensive and unexpected.
PayJunction’s research suggests that customers want flexibility when managing these costs. Although a surcharge may affect their preferred payment method, most respondents indicated that it would not necessarily cause them to abandon their preferred dealership.
Among survey participants, 30% strongly agreed and another 41% somewhat agreed that a credit card surcharge would have no impact on their dealership choice. Combined, those figures indicate that a substantial majority are prepared to remain with a dealership even if an additional credit card fee is introduced.
For dealerships, this distinction could be significant. Payment costs can represent an operational challenge, particularly as businesses seek to accommodate customers who prefer credit cards. Offering payment alternatives may allow dealerships to address those costs while continuing to give customers control over how they settle their bills.
Credit Cards Continue to Play an Important Role
Despite the possibility of a surcharge, credit cards remain an important payment option for automotive consumers.
The survey found that 82% of respondents would consider using a credit card when paying for a large, unexpected vehicle repair. This demonstrates the continued appeal of credit as a way to manage potentially significant automotive expenses.
Two of the most frequently cited reasons for selecting credit cards were rewards and the ability to spread payments over time. Sixty percent of respondents identified earning rewards or cashback as a reason they would choose a credit card, while 53% cited having additional time to pay off a purchase.
These motivations help explain why consumers may continue to prefer credit cards even when other payment methods are available. Rewards programs can provide a direct financial benefit, while credit can offer short-term flexibility when an unexpected repair puts pressure on a household budget.
The survey also found that routine maintenance and vehicle repairs were among the dealership services consumers were most likely to place on a credit card, even when facing a surcharge of up to 3%.
Routine maintenance was selected by 73% of respondents, while 67% identified repairs. The findings demonstrate that credit cards remain closely connected to automotive service spending and that dealerships may need to maintain credit card acceptance while providing alternatives for customers who prefer to avoid associated fees.
Unexpected Repairs Create Different Payment Needs
Unexpected vehicle repairs can present a particular challenge for consumers. Unlike scheduled maintenance, which can often be anticipated and budgeted for, an unexpected mechanical problem may require an immediate financial decision.
The PayJunction research suggests that customers use different payment strategies depending on their financial circumstances. Some may prefer a credit card because of rewards or the ability to delay repayment, while others may choose debit, cash or another method to avoid additional fees.
This variation highlights the importance of giving customers choices rather than assuming that one payment method will meet every need.
A dealership that provides several payment options can allow customers to select the method that best fits their circumstances. For example, a customer who values credit card rewards may continue using a credit card, while another customer who wants to avoid a surcharge may choose debit or cash.
This approach can also reduce friction at the point of payment. Customers do not necessarily have to choose between accepting an additional fee and taking their business elsewhere. Instead, they can select an alternative payment method while continuing their relationship with the dealership.
Buy Now, Pay Later Gains Attention
The survey also identified growing interest in installment-based payment options for unexpected automotive expenses.
Nearly half of respondents, 49%, said they would consider Buy Now, Pay Later (BNPL) for a large, unexpected vehicle repair. Interest was particularly notable among younger consumers, with 60% of millennials and 54% of Gen Z respondents indicating that they would consider the option.
The primary motivations were connected to managing cash flow. Sixty-three percent of respondents who considered BNPL cited the ability to spread payments over time, while 57% cited preserving cash.
These findings suggest that installment financing could become another component of the modern dealership payment experience, particularly when customers face large repair bills.
For younger consumers, payment flexibility may be particularly important. Rather than requiring customers to immediately absorb the entire cost of an unexpected repair, installment options can provide another way to manage the expense, subject to the terms and eligibility requirements of the financing provider.
Younger Consumers Show Strong Interest in Flexible Payments
The survey’s findings around BNPL also highlight differences in payment preferences across generations.
Millennials recorded the highest level of interest in BNPL for large, unexpected repairs at 60%, followed by Gen Z at 54%. This suggests that younger vehicle owners may be particularly receptive to payment products that allow them to divide expenses into multiple installments.
However, the broader survey indicates that flexibility is not limited to one demographic group. Credit cards remain widely considered across the surveyed population, while cash, debit and checks continue to provide alternatives for customers seeking to avoid credit card surcharges.
For dealerships, this means a diversified payment strategy may be more practical than relying on a single payment product or demographic assumption.
Payment Flexibility and Customer Retention
Randy Modos, president and co-founder at PayJunction, said the company’s research indicates that customers are primarily seeking payment choice rather than requiring dealerships to eliminate surcharges.
“When dealerships offer broader payment options, like credit cards for those who value rewards and debit and cash for those who want to avoid a fee, they protect both customer loyalty and their own payment economics,” Modos said. He described payment flexibility as an emerging customer-retention strategy.
The findings support the idea that payment technology can play a broader role in dealership operations than simply processing transactions. Payment options can influence how customers experience service appointments, manage unexpected expenses and decide how to complete a purchase.
For dealerships, expanding payment choice can potentially create a balance between operational cost management and customer expectations.
Technology Supports Multiple Payment Methods
Modern payment platforms can help dealerships accommodate a broader range of payment preferences. Depending on the system and applicable requirements, dealerships may be able to support credit cards alongside debit, ACH, cash and installment-based payment options.
This can give consumers more control over the final payment decision. A customer who wants to earn credit card rewards can select a card, while another customer can choose a payment method that avoids a credit card surcharge.
The approach may become increasingly relevant as dealerships manage changing consumer expectations and rising operating costs. Customers have become accustomed to having multiple payment options across many areas of commerce, and automotive service transactions are no exception.
At the same time, dealerships must ensure that any surcharge program complies with applicable laws, card-network rules and other relevant requirements. Payment technology can support these processes, but dealerships still need appropriate policies and implementation practices.
Automotive Affordability Remains a Key Consideration
The findings arrive as vehicle ownership continues to involve a wide range of expenses, including maintenance, repairs, tires and other service needs. Unexpected repairs can be particularly difficult for consumers because they can arise without much warning.
Payment flexibility gives customers additional ways to manage those costs. For some, the priority may be avoiding a surcharge. For others, rewards or the ability to spread payments may be more important.
The survey therefore illustrates that there is no single payment preference shared by all vehicle owners. Instead, customers may make different choices depending on the size of the expense, whether the service is planned or unexpected, and their individual financial priorities.
A Broader Payment Strategy for Dealerships
The research suggests that dealerships can approach payment acceptance as part of the broader customer experience rather than treating it solely as a transaction-processing function.
Offering multiple payment methods can allow dealerships to address different consumer preferences while potentially reducing pressure associated with credit card processing expenses. It can also give customers a greater sense of control at the point of purchase.
The survey’s central finding is that consumers appear more willing to change their payment method than their dealership. For businesses focused on customer retention, that distinction may be important. Providing alternatives can allow customers to remain with a dealership even when their preferred payment method carries an additional cost.
As digital payment technology continues to evolve, dealerships have more tools available to support different forms of payment. Credit cards, debit, ACH and installment financing can each serve different consumer needs.
Survey Methodology
PayJunction surveyed 500 current car owners in the United States. All respondents were at least 18 years old and had visited a car dealership within the previous 12 months.
The research examined consumer attitudes toward credit card surcharges, payment-method preferences, credit card usage and installment financing for automotive maintenance and repair expenses.
PayJunction said the findings demonstrate the importance of payment choice in the modern automotive customer experience. The company is also promoting its automotive payment capabilities and its Modern Automotive Payment Experience Guide, which explores how payment choice and flexibility can affect dealership transactions and customer relationships.
Overall, the survey highlights a shift in the way dealerships can think about payment acceptance. Consumers may not necessarily view a credit card surcharge as a reason to leave a dealership. Instead, many appear willing to select another payment method when alternatives are available. For dealerships, maintaining a broad range of payment choices could provide a way to address payment costs while continuing to accommodate different customer preferences.
Source Link:https://www.businesswire.com/
