Are Consumers Buying Cars Online?

August 13, 2020

Recently, Mike Cavanaugh, EVP MAX Digital got the conversation started with a quick poll to find out the percentage of retail sales done online as opposed to in a traditional brick and mortar dealership. With Asbury recently announcing 20% of their pre-owned sales were online[1] and AutoNation sharing 45% of their sales were online last quarter[2], we were curious to see how much this number is changing across dealerships.

Here is what dealers shared, 47% reported that under 10% of retail sales were done outside the traditional method. Honestly, this stat can be expected. What’s interesting is that 26% claimed that 11-30% of sales were completed outside the traditional “in-store” system. This stat suggests that we will see an increase in online sales. However, there is some discrepancy in the industry when it comes to defining what an online vs traditional sale actually means. With 15% claiming they have seen 31-50% of sales done outside the traditional, and 13% claiming a staggering 50%+ of sales done outside the traditional, it is evident that there is a shift on the horizon.

Initial conversations about the poll suggest that there is a high number of consumers who start their journey online and while that process is stretching further and further, most consumers still transition to the dealership at one point or another in the buying process. With a transition to in-store still in the cards, there needs to be an increased focus on making the handoffs within the customer experience smooth. The journey will be less than seamless until there is a solid foundation for helping car buyers make that transition. The dealer will continue to do their best to pick up where the digital experience left off, making sure that all the state, local, and federal paperwork that still needs to be completed is done properly, most often leveraging their time-proven process in store.

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[1] Auto Remarketing, Asbury reports 10% gain in used gross profits…

[2] Bloomberg, Top Auto Dealer’s Profit Aided by Shift to Online Car Sales