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Coronavirus pushing us into online car buying

Coronavirus pushing us into online car buying
Neil Briscoe

Words: Neil Briscoe - @neilmbriscoe

Published on: June 10, 2020

Words: Neil Briscoe - @neilmbriscoe

Published on: June 10, 2020

Ford reckons that global lock-down will give people a taste for buying cars on their computers.

Online car buying has been the coming thing for some time. Rather in the manner of some technological advances (cold fusion, hydrogen power, flying cars) it has often seemed to be held more in promise than in reality, but the current global lock-down is potentially pushing the door to online car sales further and further ajar.

While car sales everywhere are plummeting right now, the few cars that are being sold are being bought entirely online, and dealers are having to scramble to set up no-contact delivery systems to be able to meet the demands of the tiny number of customers out there. In the longer term, once the pandemic crisis has lifted, many are now thinking that the slowly-growing trend for online sales will accelerate hard.

Speaking to Reuters, Ford's U.S. sales chief Mark LaNeve said that some 93 per cent of the company's US dealers are moving their sales entirely online right now, including 'virtual tours' of cars, and online finance applications. "Good dealers have been doing remote delivery for the last 20 years, but it was maybe one a week," he said. "Now they're doing almost every delivery that way. This has just turbo charged the adoption of those processes by both customers and the dealers. To be honest, I think a big chunk of that stays with us even when we're through the crisis" said LaNeve.

Traditionally, Irish buyers have been... well, traditional. While there's an appreciation out there that online purchasing of cars might one day be a thing, up till now most Irish buyers have preferred a more physical approach.

That could be changing, however. Research by car-sales website Carzone has found that, out of 1,400 Irish car buyers surveyed, 53 per cent said that they would be prepared to pay a deposit online for a car, while 24 per cent would be happy to pay, in full, online. 57 per cent said they like to buy a car online and have it delivered to their house. Online shopping tools, such as video tours, virtual chats, and online finance applications, are seen as vital by consumers.

One Irish dealer group, Windsor Motors, is trying to push hard for online sales, and says that it's starting to see some breakthroughs in the traditionally hide-bound Irish car market. "Our research shows that 86 per cent of car buyers do at least half their vehicle research and shopping online and that 42 per cent of buyers are willing to buy their next car online. 70 per cent of buyers are confident to apply for car finance online. It is clear where the car industry is heading and we are responding to what customers want," said Peter Nicholson, managing director at Windsor. "Although the old saying that people buy from people still rings true, we have taken a strategic approach to maintaining what customers like about the conventional showroom sales model and combining it with our digital platforms to support advanced online sales."

Keary's, the Cork-based dealer group which represents the likes of BMW, Nissan, Hyundai, and Renault has also this week set up a fully-online sales system. Cars can be viewed online, sales staff are taking Skype and Zoom calls, and vehicles can be delivered, fully sanitised, to a customer. "As more customers now browse our stock and apply for finance online, we can now provide an end-to-end automotive buying experience, said Brendan Keary, director of Kearys Motor Group. The Group is including a seven-day 'cooling off' period in which it will collect a car if you're not happy with it.

Toyota Ireland is also following suit ahead of a general reopening of its dealers, asking customers to visit the 'virtual showroom' on its website where cars can be viewed and configured, finance and trade-ins can be arranged, and unaccompanied test-drives organised. Cars can then be delivered locally by dealers, and dropped off using contactless protocols.

UK website Cazoo - a start-up from the founder of house-buying website Zoopla - is offering buyers a seven-day money-back guarantee, with free collection, if they buy a car online and are not completely happy with it (although there are limits - the free collection is dropped if you do this more than once, and you won't get your original car back; Cazoo will simply try and sell you something else). Cazoo managed to raise STG£100 million in investment cash in March, in spite of the global turmoil.

Such a figure has piqued the interest of market analysts. Mike Vousden, automotive analyst at GlobalData, told CompleteCar that there's likely to be an east-west split in the way the world's consumers take to online car buying. "We are already getting an indication of change ahead by seeing how dealers are approaching sales in China, which is a few months ahead of the western world in terms of managing the outbreak. Geely, one of the country's largest automakers, has already launched a no-contact car buying service - the disinfected vehicle is delivered to the customer and the keys are sent separately via a drone" said Vousden.

"In the US, we are likely to see 'halfway house' solutions evolve, with dealers offering virtual tours of vehicles or negotiations over video calling services. One of the reasons investors were attracted to Cazoo is its focus on digital sales, which is expected to be a big plus when the pandemic comes to an end. Now more than ever, dealers must embrace new methods of selling cars to customers - especially those that allow more of the shopping and buying process to be done remotely. While we expect a relative return to normality once the pandemic passes, we also see a longer-term shift away from face-to-face sales as customers become more cautious about their interactions with others."

A couple of years ago, when polled about the possibility of shifting away from the traditional plate-glass-palace dealership model, most Irish car importers and retailers felt that was an unlikely change in buying habits on this island. With the whole world now turned upside down, that may no longer be the case.