A third of car dealers still worry about migration to online sales

Almost half (46%) of car dealers say they worry about the rise in online car purchases, according to research from Close Brothers Motor Finance.

Almost a third (30%) of dealers surveyed in the Dealer Satisfaction Survey said they worry about customers turning to online car sale websites instead of dealer showrooms, while 16% are concerned buyers will turn to online marketplaces such as eBay and Facebook.

The survey revealed that 58% of dealers have increased investment in their website to meet the growing demand of digital, while 60% have spent more on their social media channels.

While 62% use more digital tools, such as finance calculators, 41% have been offering virtual tours of their showrooms/forecourts.

Seán Kemple, managing director at Close Brothers Motor Finance, said: “The car buying experience continues to adapt to the technological advances being made across the sector.

“It’s never been a more critical time for dealers to embrace technology and offer their customers the high-level personal service that they can access from the comfort of their homes.

“After a tough year, which saw showrooms close their doors, potential buyers had no alternative than to research and purchase their car online or hold out until restrictions had been lifted. As such, the online trend is here to stay.

“Even of those who prefer to buy in person, many will still do their research before stepping onto a forecourt. And this can give dealers an advantage to reach more potential customers. So, the value of dealer advice and insight both via digital channels and in person is significant and could lead to more sales.

“As well as having an accessible and up-to-date digital forecourt, the savviest dealers have been making the most of software and tools to engage with their customers through every stage of the car-buying process.”

Dealers risk losing out on referrals from new customers who have discovered them online, warns JudgeService.

The COVID-19 pandemic and series of lockdown restrictions on car showrooms have “changed customer behaviour for good”, according to online retailer Carzam.

Although online buying has accelerated, further research from the Britain Under the Bonnet report found that drivers are not quite ready to take the full leap with buying a new car online.

Instead, motorists say they use digital channels to research vehicle choices, dealerships, and finance options. Just, one in eight (13%) drivers said they would feel comfortable buying a car online without seeing it first.

While more than two in five (43%) drivers admitted that they would prefer to browse online but would then like to see the vehicle before buying.

When it comes to car-buying decisions, younger drivers are more likely to be comfortable with buying a new car completely online, and would do so – a fifth (18%) of 17-24 year-olds compared to just 7% of over 55s.

Men are also more comfortable than women purchasing cars online at 16% and 10% respectively.

The Dealer Satisfaction Survey is a continual telephone survey undertaken by Close Brothers Motor Finance and reported on a quarterly basis.

The survey questions 200 new and used dealerships across the UK to help provide a picture of dealer trends.