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Online car buyers expect dealers to make a higher profit

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Online-only buyers expect car dealers to make a higher share of profit, than those buying direct through showrooms according to a new What Car? survey.

It found that more than a quarter of online buyers (27.59%) expect dealers to make between £2000 and £5000 in profit, compared to 13.25% of those buying direct from a dealer. 

On average, used car buyers expect lower shares of profit for dealers, with 33.93% expecting dealers to make between £500 and £1000 on a sale, 26.07% expecting dealers to make between £200 and £500, and 25.36% predicting profits between £1000 and £2000 per used sale.

For new car buyers, on average 27.84% expect a dealer to make between £1000 and £2000, while 26.99% expect a dealer to make between £500 and £1000 on a sale, and 18.75% expect dealers to make between £200 and £500 on a sale.

Just under a sixth (14.49%) of new car buyers expect a dealer to make between £2000 and £5000 on a sale, compared to just 6.07% of used car buyers.

Steve Huntingford, editor of What Car?, said: “One of the key benefits to buying a car entirely online is the added convenience – there’s no need to visit a showroom or haggle over price. What our research shows is that some consumers clearly perceive they may be paying extra for this convenience.”

More than one in 10 new car buyers are considering purchasing their next car entirely online, according to the latest research by What Car?. It surveyed 632 in-market buyers and found 11.97% of new car buyers are considering buying their next vehicle entirely online with delivery to their house, while 60.56% are looking to buy through a mix of online research and direct shopping with dealers.

Offering car buyers the ability to buy a car in minutes online is expected to be one of six key trends dealers must embrace in 2022, according to Automotive Transformation Group.

Among its top items to watch in 2022 are: offering fully end-to-end purchasing journey, harnessing the power of a truly omnichannel car buying journey, allowing customers to pay with differing payment methods, transitioning sales personnel to becoming virtual hosts, automated AI videos and enhanced live chat interaction to support buyers at critical journey touchpoints.

In January, Peugeot UK revealed that online sales accounted for 15% of its retail car registrations in 2021 – doubling its digital traction year-on-year.

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The presence of a powerful and active regulator in the marketplace, the Financial Conduct Authority, means there has never been the attention given to the critical driver of new and used car markets, point of sale finance and insurance. 

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