The ins and outs of buying a new car online


  • Internet
  • Saturday, 25 Apr 2020

Buying a car without a dealership: The pandemic appears to be accelerating new car sales online. — dpa

Buying things online has become ever more natural for almost all products – with a few notable exceptions, such as cars.

People still tend to head to showrooms and dealerships when buying a new set of wheels, preferring first to sit in the vehicle, or take it for a spin.

These days, although online sales are booming across the board, car-buying is mostly an analogue activity – but the coronavirus may change all that, says Hans-Georg Marmit, who works for KUES, a technical service provider specialising in cars.

Car dealerships are shut as part of the broad measures to stop the virus from spreading, which has created a new sense of urgency, driving change in sales methods faster than might otherwise have taken place.

"It's even more important to further develop digital services and pull out all the stops," says Thomas Peckruhn, vice president of the Central Association of the German Automotive Industry (ZDK).

New brands such as Byton, Nio and Lynk&Co are planning innovative sales models with virtual show rooms and sales contracts, while traditional brands, hampered by complex contractual relationships wiht ther dealers, are moving less quickly.

You can see offers for new cars on the websites of car producers, and you can get plenty of good and innovative advice through chats or video conferencing, but usually, you're back at the local dealership when it comes to completing the sale.

But even though the last step is in real life, most buyers start the process of finding a new car online, says Arthur Kipferler who works for Berylls, a strategic consultancy in Munich. "For almost every car that's sold, buyers have almost always started their research online."

In Germany, every eighth car is bought online. "That trend is rapidly gaining pace, even if it has yet to become a boom. But digital sales channels are definitely starting to matter more," he says.

More platforms in Germany are seeking to take advantage of that trend, Kipferler says, reeling off the names of 16 providers such as CarWow, Autohaus24.de or MeinAuto.de who are rushing to fill the gap in the market. Nine are currently only selling brand new vehicles, whereas the others sell used cars too.

These sales are often very straightforward and transparent, according to Ferdinand Dudenhoeffer, an automotive expert working for St. Gallen University. Customers use a tool on the website and put the car they are want together so it is suited to their individual needs. They have access to all the information they need about discounts, too, he says.

The order is then channelled to the brand dealership. They send the buyer a contract and deliver the car once the papers are signed and the payment completed. Customers can save some money, too, says Dudenhoeffer, who assesses the prices each month. "Buying online can mean discounts of up to 20% on the 30 most frequently-sold cars."

Alongside the newcomers, established dealers are also playing their part, says Kipferler, with many offering some form of online sales. Customers can use their online services to find out about stock vehicles, one-day registrations, models returned recently that have barely been used and lease cars that have been returned.

Many have also sold cars using email. "So if you want to buy a car and don't want to – or can't go to – a car dealership, it's possible to buy cars from regular dealers without physical contact and without using any of these new platforms."

In the United States, dealers are stepping on the gas to press ahead with contactless car buying, too. North American digital sales platform Roadster is among the leaders of the pack.

"As the threat of Covid-19 disrupts people’s lives and livelihoods everywhere, we at Roadster find ourselves in a unique position to help dealers adapt quickly and keep their digital doors wide open," the company says on its website.

For dealers who do not have online transaction capabilities already and would like to offer customers “contactless car buying” during this pandemic, Roadster is temporarily discounting its Express Storefront’s online commerce tools.

As businesses around the world have been forced to close temporarily, this trend is expected to gain momentum amid the pandemic. Most dealers are working from home at present anyway, and are keen to answer every query as quickly as possible, Kipferler says.

There are dangers, too, according to Marmit, naming hidden fees and scams as examples. "Platforms are intermediaries, not dealers. A platform receives comission from a dealer when a car is sold." If customers get a bill as well, "then watch out, it is probably a scam." – dpa

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