Twenty per cent of all UK car sales will be conducted online within five years.
According to GForces, the web management company, the path people have traditionally followed when buying a car – going to a dealership, test driving the desired car, then signing on the dotted line – could be replaced with an entirely web-based purchasing process.
The company believes that up to a fifth of automotive consumers will read online reviews from trusted outlets, find the best price, and then conduct a secure financial transaction over the internet, just as many currently do with other financial products and holidays.
The view isn't shared by the majority of dealers in an online poll on AM-online.com, with 88.9% saying they were not developing the ability for customers to complete new car sales online this year.
One dealer said: “We as franchise dealers need to give prospects and customers every encouragement to visit our dealerships and build relationships not the reverse."
However, Tim Smith, GForces commercial director isn't deterred by this view, he said: "People are more comfortable with purchasing large products online. Many of our clients are meeting their customer’s demands by moving more of the car sales functions online such as vehicle reviews, virtual test drives, finance propositions and insurance quotations.
“Visits to dealerships will continue because some people want to test drive the vehicle or speak face-to-face. However, the internet generation are less inclined to this behaviour.
"This fact, coupled with improving vehicle quality and extended warranties, makes the test drive less important than it once was. Consumers also have the added protection of distance-selling regulations that gives people a cooling-off period once a vehicle is delivered to them.”
Smith believes that the increased virtualisation of society through social media and reliance on technology to deliver experiences and interaction, mean that there’s no real reason why even something as emotive as a vehicle purchase can’t be conducted over the web.
Smith said: “I am not saying that everybody subscribes to this way of life, but there is a significant and growing population that does and this is only going to increase.
“With car supermarkets and franchised dealer groups focusing more and more of their marketing spend online, it’s clear that the next logical step is for them to offer people the convenience of buying the car online.”
Nearly a quarter of 8,000 people polled in a Capgemini study said they are very likely or likely to purchase a vehicle over the internet in the future.
Smith said: “Research results like these, coupled with people’s growing propensity to look to the internet for trusted information rather than visiting a dealership, suggest to me that dealers’ websites will soon offer the facility to complete the final step in the process, too.”
However, rather than forecasting the beginning of the end for traditional dealers, Smith believes that they now have the chance to get their online presence in order before the goalposts move. “This is a fantastic opportunity for car dealers, rather than a looming disaster.
“If they take this chance to put in place an effective web marketing strategy, they’ll be far better equipped to operate successfully in the online marketplace of the future and to adapt to whatever consumer trends come their way.”
Read the February 25 issue of AM to see how Lifestyle Europe is developing its online new car sales strategy and engaging with customers through social networks.