The traditional car buying experience has been a staple of American culture since 1889– close to the invention of the vehicle itself. But the last few years have seen a shift as online shopping gains ground within the auto industry.
Recent research by McKinsey reveals an interesting story: 52% of consumers are now open to purchasing their next car online, with 29% willing to complete the entire buying process digitally.
While this trend might seem to favor newer delivery companies like Carvana or Shift, traditional dealerships are uniquely positioned to leverage this digital movement to advance their business and grow revenue through omni-channel sales.
Online Car Buying Trends: What Dealers Should Know
Car buyers aren’t unique in their adoption of digital experiences. From self-checkout kiosks to contactless delivery, today’s customers value independence and convenience more than ever.
While exceptional customer service once meant having a dedicated representative guide you through every step, modern consumers often prefer navigating the process independently, at their own pace.
This shift explains why the internet has become an indispensable tool in car shopping. Google’s research shows that an overwhelming 92% of car buyers conduct online research before making a purchase. As consumers prioritize convenience and price transparency, online shopping offers an accessible, friction-free experience at their fingertips.
The numbers speak for themselves. A January 2022 survey from Progressive revealed that 78% of American consumers who bought a car online in the previous two years reported high satisfaction with their experience. In contrast, only 58% of traditional dealership customers expressed the same level of satisfaction.
The competitive landscape is also evolving rapidly. With Amazon’s recent entry into the automotive market through Amazon Autos, shoppers can now access an entirely digital sales process for Hyundai models. After searching for their desired vehicle by model, trim, color, and features, they’ll also be able to get financing and e-sign paperwork through the site.
As competitors continue to emerge, traditional dealers must innovate to maintain their market position. By incorporating digitization at key points in their buying process, savvy business owners can ensure that they don’t just stand out, but also win the deal.
5 Digital Improvements for Your Sales Process
1. Offer an in-person experience online
As more shoppers are doing research online before even stepping foot into a dealership, it’s essential that your digital presence reflects your brand. Beyond maintaining an updated, user-friendly website, this means implementing features that mirror your in-person experience.
Virtual showrooms are becoming an essential component in the online sales process. Google data shows that 64% of shoppers who watch online videos would consider buying a car without a test drive if they could access formats like 360° video.
2. Embrace the hybrid model
Even as the internet becomes a bigger player in the car buying process, many shoppers will still be visiting their local dealership before they close the sale. Test drives continue to be the primary reason people visit dealerships, cited by 34% of shoppers. That means dealers need to figure out how to enable a seamless transition from online to offline.
One way you can optimize for modern buyers is by offering a continuous experience regardless of the channel. When shoppers request quotes or schedule test drives on your website, you can collect information that gives you valuable insights into what they’re looking for. This can save them from doing double work and provide a more personalized customer journey.
3. Let customers handle paperwork at home
Like many tech advancements, one of the biggest benefits of managing your auto sales online is the opportunity to reduce friction in the process. For many customers, the ability to complete paperwork from home is a major benefit of buying a car online.
Many dealers have responded to this demand by enabling customers to verify their identity and insurance before leaving home and apply for financing through their website. As more shoppers are able to manage these steps without waiting around in a dealership, consumers can access a streamlined experience while businesses can reallocate their resources toward other projects.
4. Focus on trade-ins
Trade-ins represent a major opportunity in the online space. Progressive survey data shows that 67% of online car buyers trade in vehicles compared to 50% of traditional dealership customers. Even more telling, 80% of online shoppers report high satisfaction with the trade-in process, compared to 60% of in-person shoppers.
This is likely due to the streamlined experience many consumers can access when they trade in a vehicle online. Using digital tools, dealers can enable consumers to input basic vehicle details, such as make, model, year, mileage, and condition– then instantly generate a valuation. This transparency and convenience can significantly enhance the trade-in experience.
5. Prioritize security in online sales
Despite the benefits, online car sales can pose additional security risks on both sides. Many consumers have been victims of fraudulent transactions, to the point where local government offices issued press releases warning civilians about the schemes.
Similarly, some fraudulent buyers aim to take advantage of the relative anonymity in online sales. Risk mitigation expert Tom Kline told Modives about a common scheme he sees in car dealerships, in which the driver requests last-minute delivery once the deal is signed in an attempt to avoid dealership security cameras.
To combat these risks, dealers can take steps to defend against fraud attempts. For instance, many implement robust authentication during the sales process, including insurance and ID verification that cross-references against official databases. With these solutions, they can securely validate that the buyer is who they say they are.
Similarly, dealers can do their part to instill confidence in customers by leading with compliance throughout the process. For example, follow the appropriate data protection regulations, including proper cookie permissions and clear data usage policies. If customers can see that you prioritize their security, they’ll feel more confident doing business with you.
How CheckMy Driver Can Help
As dealers aim to appeal to online car buyers, adopting modern tools is essential in their transformation. With CheckMy Driver’s insurance verification process, you can give your customers a quick, user-friendly way to complete their paperwork online. Not only can they verify their coverage from home, but they can do it in as little as three minutes, compared to 15-30 minutes in the dealership.
Many dealers are also using CheckMy Driver to improve personalization throughout the sales process. With its new Driver Insights feature, you can securely access enhanced data on every customer who completes the verification process. That means that you can proactively reach out with opportunities that resonate with them, from new car deals to trade-ins.
CheckMy Driver doesn’t just streamline the car buying process– it also makes it safer. With the CheckMy ID add-on feature, dealers can perform 100 algorithmic checks on a customer’s license in seconds to make sure they are who they say they are.
The application is also SOC 2 Type II certified, which means that your customers can trust that their data is being handled securely.
Want to learn more about how CheckMy Driver can work for your business? Reach out to our team to chat.
