Dive Brief:

• CarMax partnered with coffee chain Dunkin' to promote a new service that gives customers 24 hours to test drive a car. As part of its "Doin' Donuts" campaign, the used-car dealer is offering $10 gift cards for customers to redeem at the Dunkin' drive-thru window until May 16, per an announcement.
• The two brands also are offering car shoppers a chance to win free doughnuts for a year by sharing their 24-hour test drive experience on Twitter or Instagram with tags @CarMax, #DoinDonuts and #24HrTestDrive. The brands will select 24 winners who will receive a "Doin' Donuts" doughnut holder.
• CarMax enlisted actress Busy Philipps to offer recommendations on activities to do during their daylong test drives, which are intended to give customers a better idea of what it's like to own a car before buying it. Philipps is posting those activities, which include a stop at Dunkin', on Instagram. Customers who visit participating CarMax locations to take a test drive will receive a checklist of activities, which include a visit to a Dunkin' location, per the announcement.

Dive Insight:

CarMax's collaboration with Dunkin' on a gift card offer and sweepstakes comes a few months after the used-car dealer introduced its Love Your Car Guarantee to help consumers feel more confident about their car-buying decision. As part of that program, CarMax extended its money-back guarantee and introduced the first 24-hour test drive. The company found in a study that 96% of used-car shoppers wanted to trial a car for a day, while 63% would need more than a week to feel confident they made the right purchase.

The collaboration with Dunkin' aims to give car shoppers another reason to trial a car, a key step toward closing a sale. As many as 67% of U.S. adults said they consider a test drive a "very important" part of the buying process, including 74% of women and 70% of all middle-income adults, Autotrader found in a survey. As CarMax seeks to lure more people to dealer lots, offering incentives to test drive a vehicle can help to bring consumers into the purchase funnel.

CarMax has reported steady sales gains throughout the pandemic, which disrupted the supply chains for carmakers and constrained the supply of new vehicles. Amid a global semiconductor shortage, U.S. carmakers continue to face difficulties in getting new cars off the assembly line. Those bottlenecks have helped to drive demand for used cars, whose wholesale prices surged as much as 24% in mid-March from a year earlier, according to vehicle auction company Manheim.

CarMax's sales grew 4.1% from a year earlier to $5.16 billion in the quarter ended Feb. 28, despite disruptions including a surge of COVID-19 cases that forced the company to restrict occupancy at some locations. Sales also slowed in February because of delays in tax refunds, and winter weather hampered its operations, per a quarterly report. As the weather gets warmer, CarMax aims to boost foot traffic with the "Doin' Donuts" promotion with Dunkin'.

For Dunkin', the promotion is a way to boost visits to its stores as CarMax customers take test drives. It's also a sign that the coffee chain is supporting its marketing programs after being acquired by Inspire Brands — which also owns Arby's, Buffalo Wild Wings, Jimmy John's and Sonic Drive-In — for $11.3 billion last year. Dunkin's recent promotions have included last month's rollout of a merchandise collection inspired by Charli D'Amelio, the TikTok star who has worked with the brand since last year. Before that, the chain also offered a seasonal menu for Valentine's Day and a sweepstakes that gave couples a chance to get married or renew their vows in a drive-thru lane.