Consumers want to buy cars online and prefer dealers who offer it, so what's the holdup?

February 10, 2017

These days, you can buy just about anything online: clothing, food, sexytime accessories, even booze. One of the few things you can't purchase online, however, is a new car.

According to a survey conducted by marketing firm Root & Associates, that's a real frustration for shoppers, and it could become a major problem for dealers very soon.

The survey data reveals that, if given the chance, 53 percent of U.S. consumers would be either "extremely" or "very" likely to buy a car entirely online, and 59 percent said that they expect to be able to conduct purchases through dealership sites. (Provided of course that they're give the chance to inspect and test a car in person before finalizing the sale.) Our own, totally informal poll yielded similar results, and another showed even stronger support for online car-buying. 

However, Root & Associates say that just 35 percent of dealers are interested in selling vehicles via their websites

That's a substantial disconnect and suggests that dealers aren't entirely tuned in to what today's consumers want. As online shopping becomes increasingly common, the dealerships that excel will be the ones that adapt to shoppers' demands.

What does adaptation mean? For dealerships, the writing on the wall is clear. Consumers hate haggling. A Gallup poll conducted in December shows that the only people Americans trust less than car salespeople are members of Congress. A substantial portion of shoppers are so eager to avoid dealerships that they're willing to buy cars on their smartphones.

Those attitudes are already having an effect on dealers today. Tesla has been working to undo the dealership model for years, with varying degrees of success. Established automakers like Volvo and General Motors are taking notice and are working to give shoppers the option to (mostly) bypass dealerships altogether. 

Meanwhile, dealers have fought back with so-so campaigns to boost the public's appreciation of what they do. 

When will we see change?

The auto industry in the midst of some major shifts--technological and behavioral shifts that make it very difficult to predict the industry's future. At the moment, observers are left with more questions than answers. For example:

  • When will electric vehicles truly take off? (Probably when gas prices begin to climb again.)
  • When will self-driving cars become commonplace? (Probably sooner than any of us think.)
  • And most importantly: how will trends like increased urbanization, car-sharing, and ride-sharing affect auto sales? (We don't know, but tomorrow's auto market will probably look radically different from today's.) 

In the current auto market--a booming market that consists largely of gas-powered vehicles that aren't remotely autonomous--it might seem as if such changes are far, far down the road. With sales near record highs, dealers are wary of changing their business models too dramatically. After all, if it ain't broke....

And yet, evidence clearly suggests that the dealership model is indeed "broken." If dealers don't wake up to that soon, they could find themselves left in the lurch: 86 percent of those surveyed by Root & Associates said that they'd choose to do business with dealerships that offered online sales rather than those that didn't.

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