The future of car buying: The next normal
The COVID-19 pandemic has changed our liveas in many ways. Masking up, getting vaccinated, social distancing, sanitization, quarantine, remote work and study have all become the new normal. And we have become accustomed to many other things like shopping online and people are moving towards shopping for things online that traditionally we did not; for instance, cars.
Normally, when you had to buy a car, you would go to a car dealership, haggle for prices, get a good financial deal and drive the car home. However, this changed quite a lot after the Coronavirus pandemic struck. Caravana, one of America’s leading car buying websites, recently reported that it had observed a big spike in traffic and sales numbers after the pandemic kicked in in 2020. Caravana said that it saw about a 25% rise in car sales in the second quarter of 2020 and the number hasn’t gone down since. People now find it safer and easier to shop for stuff while sitting at their homes.
A yet another auto portal, CarGurus, recently conducted a survey about car buying preferences. The survey found out that over 55% of the respondents didn’t find visiting physical showrooms safe and hygienic and said they were comfortable with making a car purchase online. So, is the future of car buying online? Does that indicate the end of the road for physical dealerships? Well, that isn’t quite exactly the case.
With digitization and digital tools evolving rapidly, the automobile sales model will change big time in the next 10 years. And it doesn’t mean that there are no longer dealerships and showrooms but these places will offer a more personalized and sophisticated experience to the potential buyer. The future of car sales is going to be omnichannel.
Automakers are in a process of developing models that would be more focused on helping the buyer get what they want than what the automaker has on offer. It would revolve around a buyer opting for features and equipment that he/she needs rather than just the appeal or snob of a certain brand. Automakers and dealerships are evolving digitally to cater to just what the buyer wants.
The dealership of the future will not need to maintain a large inventory to explain to buyers the car’s features and details. Instead, automakers have been investing in developing augmented reality setups where a digital image of the car can just float in front of the buyer and the buyer can tinker virtually with all the features and options of the car.
The buyer can virtually customize the car and have the exact same feel and experience as he/she would have in a proper, physical car. And the dealership would not have to maintain any form of inventory; the car would be built specifically for you, just according to the specs you mentioned.
Many Americans on the other hand say that they wouldn’t buy a car without test-driving it. Which is correct. One should never buy a vehicle without driving it. Well, AR and VR technologies have all the potential to transform that. A dealership will have a virtual driving setup where you can have the exact experience of driving a vehicle in any form of terrain you wish.
That way, the dealership, and the company cuts inventory costs but also on fuel and maintenance expenses of the test vehicles. Moreover, it would just help the buyer understand how a vehicle performs under different terrain conditions which normally is not possible as you only get to drive around the areas where the dealership is located.
Further, the future of car buying will revolve more around shared mobility. With vehicles getting smarter and autonomous, carmakers will offer customized plans for vehicle purchases. For example, on the weekdays, you would keep a small compact electric hatch or crossover that would just suffice your daily driving needs while on the weekends you exchange that with a dealership for a larger SUV or truck that you can use to carry your family and luggage on a trip. The evolving car buying practices will also drastically impact ownership models.
Car buying in America still involves a lot of haggling and negotiations and that has to change. Many notorious dealerships still have hidden charges and commissions involved and many times dupe buyers. However, technology has the ability to make the process transparent and hassle-free. Online car buying websites have no scope for negotiations. The prices there are fixed and never really have any hidden costs or commissions. The dealerships of the future too shall emulate this model and protect buyers from exploitation.
With the multiple vehicle sales packages and changed ownership models, the costs of buying a stand-alone car will further go down. Moreover, there will be many used cars on the market with very little mileage. Dealerships will have both used and new cars on sale. The role of a car dealership in the community will evolve from just car retailers to mobility service providers. And that’s what the next normal in the auto world will be like.