The future of car buying may soon be entirely online

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Buying a car through an e-commerce app or online is probably not something consumers would have even considered a few years ago, but that attitude is rapidly changing as people get used to shopping online.

Consumers have gotten used to buying computers, takeout, plane tickets and everything else online during the pandemic, but until now many have been hesitant to make larger, more complex purchases like cars. .

“We have already seen the Internet dramatically change the journey to buying a car. In the past, you would visit multiple dealerships to see what was available and get advice.

However, today you can do your research online to narrow down your favorite brand and model, as well as find the best deals. Then you can see and test the car before deciding,” says Ernest North, co-founder of digital insurance platform, Naked.

He says that in the future we can expect this process to be fully online for a significant portion of car sales.

“More and more people will not only do their research on the internet, but also buy the car with just one click. It’s a global trend, with Allied Market Research predicting the global online car buying market will grow from $238 billion in 2020 to $723 billion by 2030.”

READ ALSO : Important things to remember if your car needs to be towed

Advantages of buying a car online

One of the benefits of buying a car online is that it allows you to search for your ideal car from an endless array of online car dealerships, marketplaces and private sellers.

You can easily gather information on different cars, compare prices and specifications, and pay online before picking up your dream car. You can even have it delivered to you.

North says this opens up a world of possibilities.

“If you live in Cape Town, for example, you can buy a car from a dealership in Gauteng if it saves you money or if there is no stock at a local dealership. You will also be able to compare prices at a glance, without negotiating with a salesperson who only has one eye on his commission. A natural result of going online is that prices will start to converge and become completely transparent. »

By comparison, in the traditional car buying journey, there can be a 25% or more variance in the price of a car of the same year, make and model between different dealerships. This reflects factors such as accident and maintenance history, mileage and general condition of the car, as well as the negotiating position of the two parties.

“We’ve certainly come a long way in the online car buying journey. Pretty much the only thing you still have to do in person is take the vehicle for a test drive. Options like seven-day returns days may even make it unnecessary for most people.

READ ALSO : Top tips for insuring your used car

Personal advice when buying a car

Inevitably, a portion of consumers will always feel more comfortable with advice from a dealer in person, but over time the proportion of cars sold entirely online will increase as dealerships and automakers improve their online capabilities, North said.

“A few automakers are already selling some new vehicles fully online in South Africa. One of the best examples is Volvo’s “Build your own” feature on its XC60 Recharge.

“WeBuyCars’ online auction service is a good example of used cars being traded entirely digitally. Even so, we are only at the beginning of the digital transformation of car shopping.

Today, some manufacturers allow you to configure specs and features to your liking before you complete the order or head to a dealership, while most automotive websites can show you high-res images and videos of a car for sale.

Soon, says North, we may see AR/VR experiences showcasing cars with immersive experiences that help you feel really comfortable with the car you’re buying.

“The next step will be to offer a true one-stop-shop experience. We can expect online dealerships, automakers, and marketplaces to allow you to compare finance, vehicle, and insurance deals all in one place. You’ll be able to arrange financing, buy the car, and get insurance from your laptop or smartphone, without needing to fill out forms or talk to call center agents.

Until that happens, North points out that you can already find financing and buy insurance through digital channels, making it easier and faster to compare offers. Naked already offers a final quote in 90 seconds and you can buy coverage for your car on the spot without a single phone call.

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