Published: April 6th, 2023
Writers: Russ Heaps
Link: https://www.autotrader.com/car-shopping/buying-online?mod=article_inline
Although buying a car online was available to consumers before 2020, the circumstances born of the COVID-19 pandemic response brought it to the doorstep of car shoppers and car dealers. With many car dealerships locked down, car shoppers discovered online purchasing as the most convenient and safest method for buying a car.
The global management consulting firm McKinsey & Co. stated that 29% of consumers say they want to buy their next car entirely online. Another 23% want to order online but still have some contact with a dealer. Are carmakers and their dealers prepared for this sea change?
Today, some dealerships provide an in-house internet manager to work with remote shoppers. However, this feature is not widespread. More often than not, if you have questions during the online buying process, you will find yourself speaking to a showroom salesperson. For the most part, online purchases funnel through a franchised dealer, beyond some electric vehicle mavericks like Tesla Rivian and Lucid.
Buying new cars online, today
Traditional carmakers are deeply embedded in the franchise system in which dealerships are owned independently of the brands. That is, the brands (Ford Toyota Kia and so forth) don’t own dealerships. Although a brand and its dealers work together in many ways, a dealer runs the dealership as a small business. Consequently, the act of buying online today is a transaction between you (the buyer) and a franchised dealer. This is true whether you use the carmaker’s website to find your dream car or utilize the website of a local dealer.
Current innovations for buying a car online
- View inventory – Whether you use the build-and-price tool on a carmaker’s website or skip right to clicking “Current Inventory” for whichever model you want. You can look at the inventory in your local area, state, or nationwide, for that matter.
- Detailed information – As you peruse the available stock, you can pick a vehicle and often learn its details. Such data can include standard features, specifications, warranty information, and more. You can determine the vehicle’s identification number (VIN) and often access a copy of the Monroney window price sticker in many cases.
- Virtual walkaround – Where we used to travel to a dealership or settle for a series of online photos, today, many dealer websites offer a 360-degree virtual tour of the vehicle. These tours aren’t only for the exterior but for the interior, as well.
- More information – You can usually schedule a test drive, request a price quote from a dealer, and receive an estimated monthly payment online.
The dealer’s role when buying a car online
Boosters of e-commerce would have us believe that soon the franchised dealer will be little more than an observer of the online buying process. In other words, the dealer’s role will be to supply test-drive vehicles, deliver purchased cars, and perform scheduled maintenance and repairs. Far in the future, that might be the case; however, in the foreseeable future, the dealers have a dependable ally in the franchise system and the courts that steadfastly uphold it. That’s not going to change anytime soon.
Commentary
It is interesting to hear about a business model of selling cars online. The way customers browse for, test drive, and buy cars are going to change dramatically in the next coming decades. The survey mentioned in the article describes the increase of the desire to shop for a car online. There is still a franchise dealer helping customers online which allows them to get a first hand account of any unique features of new cars. The innovations of available information for an online car customer is becoming more advanced and extensive. Another possible benefit could be getting connected with previous customers about the car or trustworthiness of the dealership.
