A sizeable proportion of consumers have purchased used cars and vans without any dealer contact, via iVendi's online platform.
The company sampled 12,500 of its motor finance transactions and found that 35% were sold without any need for any dealer contact, being sold at the vehicle’s windscreen price and using the dealer’s online finance.
IVendi’s chief executive James Tew (pictured) said: “There is some debate in the industry about whether many ‘genuine’ online used car sales are taking place. This research helps to throw some much-needed light onto the subject.
“Out of our sizeable sample of used car sales, we can see that already a number of customers are effectively completing the entire used car journey online and that many more could potentially do so.These people are finding their own vehicle, they are not haggling and they don’t have a part-exchange. They are perhaps the easiest customers that a dealer could have – it is simply a matter of perhaps arranging a test drive, and collection or delivery of the vehicle.
“The only part of the process that isn’t taking place online – and which simply can’t – is the physical viewing of the vehicle. What tends to happen is that the purchase continues on a trust basis until the final step, when the customer sees the car or van and can assess that it meets the dealer’s description.”
Around one in 20 (5.6%) purchases in the sample were fundamentally completed entirely online, in the sense that there was no e-mail, phone or physical contact with the dealer until the final step, when the car was collected or delivered. The customer followed a structured, online buying process.
Tew said:“There are some people in the industry who believe that there are few or even no online used car sales. This analysis suggests that simply isn’t true, that where customers are given the opportunity, a significant proportion will complete as much of the sale online as possible.
“Our belief is that there are probably a whole series of factors around this journey. These customers are likely to carry out research into the dealer first, looking at online reviews, at their warranty proposition and so on. However, having established a basic level of trust, they are clearly happy enough to transact online.
“Because the customer doesn’t see the car until the very end, these trust factors take on a new level of importance when it comes to this kind of process. They are crucial to the whole online sales proposition. Dealers need to tackle questions such as, what happens if a car purchase online goes wrong?
“We have no research where we could definitively say that X% of used car customers will buy online but, we have shown, these people exist in relatively large numbers. By not providing a comprehensive online offering with appropriate trust factors built in, you are encouraging them to shop at dealers that do.”