While consumers and dealers expect online activity in the used car market to increase in the future, the presence of a physical dealership remains important – pushing the ‘clicks and mortar’ approach.
This is according to research from Startline Motor Finance, which found that 64.3% of dealers are planning to invest in online finance in the next 12 months. Meanwhile, 84.2% of dealers said it remains important for the customer to visit their showroom.
Similarly, 55.3% of consumers said they would be happy to buy a car online, with seven in 10 respondents also happy to arrange finance for the vehicle online. Just over a third of consumers said having a local dealership was essential, while 51% said it was ‘nice to have’.
“It’s tempting to get caught up in the narrative that all motor retail is inexorably migrating online and, in the much longer term, that remains a possibility, of course,” said Paul Burgess, chief executive at Startline.
“However, what our research shows is that, for the moment and into the foreseeable future, there is still a need for the local dealership to sit alongside newer online channels when it comes to selling used cars and motor finance – the ‘clicks and mortar’ approach.
“It’s important to understand the psychology of this. A car is among the largest purchases most consumers will make. It is not a pair of jeans. Many people will want to take a good look at what they are buying – drive it, sit inside, ‘kick the tyres’.”
Findings also indicated around three quarters of dealers believe that a complete online retail process will definitely or probably impact how the industry retails cars – and one in five believe they are already prepared for this to happen.
Burgess added: “Dealers are caught in a situation where they need to invest both traditional and online sales channels, which is clearly quite financially demanding. However, this will open up potentially much larger markets to them both geographically and demographically.”
The report surveyed 57 senior managers at dealer businesses for the study.