Walking into a car dealership can make you feel like a tasty little fish that finds itself thrown into a shark tank. It’s not the only way to buy a car, however. half of car buyers surveyed by Progressive in January 2022 have purchased their cars online for the past two years.
The pandemic has caused a boom in car purchases, with people moving from cities to suburbs and avoiding public transport and ride-sharing services. But a shortage of chips meant fewer cars were available, leading dealers to very little inventory. Together, these factors have fueled online car buying.
Unsurprisingly, the lack of in-person upselling proved popular: 78% of survey respondents told Progressive that buying a car online was a very satisfying experience. Only 58% of those who purchased from a dealership rated their experience the same. Although a legal tangle prevents automakers from selling directly to consumers in all 50 states, some (including Ford, Nissan, Toyota and Volvo) have created platforms that allow people to buy vehicles online through dealerships. There are also many online marketplaces that serve as virtual dealerships for cars of all makes and models.
Carvana is the top way to buy a car online (21%), followed by Cars.com (13%), CarMax (12%), dealer websites (11%), Carfax (10% ), Autotrader (6%), and Vroom (6%).
Buying a car online was embraced primarily by 18-24 year olds, with 77% of respondents in this age group saying it was how they acquired their vehicle. The younger the customer, the more likely they are to buy their car online. Seventy-four percent of those aged 25-40 had done so, 53% of those aged 41-56, 20% of those aged 57-66, and 21% of those aged 67 and older .
The main motivator to buy online for 25% of respondents was the ability to find the car they wanted, the next price (21%), followed by COVID-19 restrictions and comfort level (14 %).
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Buying a car from home gives people time to research their options, compare prices, and make a decision. Just over half (51%) of people who bought their car online visited three or more sites. The only thing missing when shopping for a car online, of course, is the test drive. But buyers can still go to a dealership to test drive a car. Forty-eight percent arranged an online test drive through a dealership, while 27% visited a dealership before making their decision (and likely paused before a salesperson could give them the hard sell). Most car buying platforms have a return period of around one week.
Although online buyers were satisfied with the process, they had suggestions for improvements, namely “better defining the conditions for returning a vehicle”, “being more competitive on the financing rate”, “longer return period long” and “registration needs to be done faster.”
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