The Post-Covid Car Industry: How will we buy cars?
Online car shopping is just getting started
“We were already seeing a shift online in the industry, but this crisis has definitely accelerated the transition,” said Alex Hurst, CCO of CarFinance 247.
While many of us still associate car buying with days spent trawling showrooms, negotiating with salesmen and kicking tires, visiting the dealership – even pre-Covid – is now much more likely to be the final step in a car buying journey that starts online.
In recent years dealers have had to become more tech-savvy, making sure they have a web and social presence that can attract customers searching for cars online from all over the UK. And with large online-only retailers starting to cement their place in the industry, the trend towards a fully digital car-buying experience looks set to continue apace post-Covid.
“The online buying experience that many dealers now provide is just as good as in-person, and this crisis has proven that,” said Louis Rix, CarFinance 247's co-CEO. “Customers have access to high-quality photos of a car’s interior and exterior and can watch videos to find out how the car performs on the road. I can only see this continuing post-Covid.”
And with remote buyers often protected with return policies (ask your car dealer for details of their policy), much of the risk that can come with buying a car sight-unseen has been eliminated. Buyers can now trust and have confidence in their purchase.
Click and collect could become more common
Another consequence of Covid restrictions on car buying has been the growth of click and collect. This bridge between a purely online buying experience and the traditional dealership set up could become one of the lockdown’s lasting legacies.
It could offer the perfect compromise; buyers can research online, compare models and offers at different dealerships, and then visit those dealerships to pick up the car in person, carry out visual checks and drive away.
“I think we’ll see many more drivers choosing to reserve cars online before visiting the dealership to complete the purchase,” said Reg Rix, co-CEO of CarFinance 247. “Every used car is unique so it’s understandable that customers will still want to see the car up close before making a commitment. New cars are more uniform – what you see is what you get on the whole – so I’d expect click and collect to be popular in the used car market and delivery more common for new.”
Delivery looks set to stay
With people confined to their homes for most of April and May, delivery became the only way for people to get hold of a new car. And it’s another Covid initiative that looks likely to remain on offer now that lockdown has eased. Just like online car buying, the convenience of car delivery brings the industry in line with many other retailers and could quickly become a consumer expectation even after travel restrictions end.
Despite its logistical challenges, delivery can benefit dealerships too. “We’ll definitely continue working with dealers who are willing and able to deliver,” agreed James Weir, CarFinance 247's Sales and Operations Director. “Not only because our customers like it, but also because it allows dealers to broaden their audience and reach new customers based further afield.”
The need to ensure deliveries are contact-free will disappear post-Covid but the ability to order your car online and have it delivered to your door will continue to appeal to customers already used to this process with smaller purchases. And with the confidence of a potential return period, the prospect of making such a large purchase online is a lot less daunting.
Delivery could also help to continue another pre-Covid change that looks set to stay; the consolidation of dealerships and a focus on efficiency when it comes to the showroom and team sizes.
Social distancing will be short-term
When car showrooms reopened on 1st June, they did so with a range of social distancing measures in place. Limited numbers of staff, hygiene steps such as plastic-wrapped steering wheels, and solo test drives have been just some of the initiatives introduced.
While the effect of Covid may continue to impact the number of staff and showrooms open, the design of most dealerships means that social distancing could easily be maintained long-term if there was consumer demand.
However, it’s likely that most hygiene and social distancing measures brought in as a direct response to the crisis will be relaxed or removed completely once the threat of transmission is over.
“I think it’s unlikely that dealerships will continue to allow solo test drives and similar measures once the virus is over, probably because those kinds of measures can be replaced digitally. Consumers might not feel they need a test drive at all when they can find out so much virtually and reduced footfall will make social distancing the norm, no enforcement needed” agreed Louis.