Car buyers self-serve online during most recent lockdown

MORE than a third of used car buyers self-served motor finance and other elements of their purchase online during the most recent lockdown.

Online motor retail specialist iVendi said this figure, which is taken from activity across its user base and covers the whole of January to March, compares to 15% for the corresponding period in 2020 and 10% in 2019.

Chief Executive James Tew said that this dramatic increase was, of course, largely prompted by the closing of showrooms but that it also had potential implications for the future.

“It’s worth looking at these figures in more detail. What they indicate is that around two-thirds of sales made during the lockdown were originated using traditional remote contact methods – such as telephone and e-mail – while 37% used an entirely online process. This will have involved buyers using either the dealer’s web site or our Digital Deals product, which builds an online proposition for each individual.

“In our view, this shift is interesting because it is helping to create what you might call an ‘online literate’ consumer base who are relaxed about the process of buying and financing their car online. In the same way that there are other relatively complex online processes with which people have become comfortable, such as buying insurance, we are seeing a similar trend potentially developing for car buyers.”

Tew said that this development had a number of positive implications for both car buyers and dealers that, during the pandemic, these had probably become more apparent for both groups.

“Retailers and consumers tend to widely adopt online processes when the benefits of doing so become evident and that is something that could well be happening here.

“The key advantage for car buyers in shopping online is the very high level of control they enjoy and the removal of any feeling of showroom pressure. They can make decisions about everything from the vehicle they want through to the best finance product for their needs, all in their own time.

“For the dealer, much of the administration surrounding the buying process is passed to the consumer. Sales staff can concentrate on selling rather than taking a customer point-by-point through the completion of a lengthy finance form, for example.

“The question, really, is the extent to which successive lockdowns have embedded these changes permanently in the minds of dealers and buyers when it comes to the used car market, or whether it is just a direct effect of showrooms being closed. We should start to find out the answer during the next couple of months as the lockdown is eased.”

Tew added that, whatever the outcome, iVendi did believe that a large number of dealers had become aware of the benefits of steering customers towards self-serving during the pandemic.

“Traditionally, dealers have perhaps been a little wary of losing control over the sales process. If they fill in a finance form with a customer, they know it will be completed, rather than sending them to a web site. But they have learnt during the last year that, if anything, finance penetration increases when customers are given direct control.

“Interestingly, the benefits of self-serving appear to have become especially apparent for smaller, independent dealerships that have only a handful of staff. They have been among the fastest and most enthusiastic adopters of our Digital Deals product, for example, because they can see clearly that it is a more efficient use of sales time.”