The used car market is one of a long list of sectors that have been upended by the internet, and the dealers with the best-run and most profitable operations are those that embrace it. According to CarGurus’ One Voice report, 73.2% of used vehicle retailers have adopted digital strategies to boost their businesses.
That doesn’t just mean they’re advertising stock online, as dealers have sniffed out plenty of other ways to use the information highway to their advantage. Given the popularity of finance for retail sales, offering it online has the capacity to speed up the buying process. If consumers are able to crunch the numbers before they head to your showroom and are already clued up about available deals, then the in-person visit should theoretically be the last step of the process, which means they’re far less likely to defect to a competitor following that last step.
According to our survey of used car dealers included in the One Voice Report, 72.9% already use online finance completion, while 28.2% intend to adopt it in 2019. Assuming that happens, it will be close to market saturation by the end of this year.
Paid search and online trade-ins
Our research also shows 45.5% of used car dealers have already engaged in paid search, or search engine marketing (SEM) as it’s commonly called. It’s only natural that retailers should implement such an initiative, as the majority of buyers do their research online well before they visit a showroom, while 27.8% of those surveyed signalled their intentions to include paid search this year.
Even more popular is the trend for online trade-in valuations, as 61.6% of used car dealers already offer such a service, with 29% planning to get in on the act this year. Again, if that happens, they won’t be far from universal as 2019 draws to a close.
Video and chatbots
While video has become a popular method of showcasing used stock online, it remains a growing area, as 35.2% of dealers told us they were already using it. However, 39.6% said they were teeing it up for this year, which would bring it up to a comfortable market majority.
Chatbots, on the other hand, are, so far, less popular. Only 17.1% of respondents told us they were using the technology to communicate with customers via their websites, while 23.3% said they were planning to introduce the systems, which would render them utilised by well under 50% of the market by the end of the year.
Dealers still see the value in them, though, as they can be used to free up staff for other duties. “I think people might start using them instead of having dedicated personnel to reply to chats,” said Catherine Oldfield, digital marketing specialist at Mike Brewer Motors. “It is automated messaging: instead of answering live chats…our salespeople can be used on other things.”
Full online sales
Our evidence shows there is still a long way to go before either dealers or their customers reach the stage where click-to-buy used car sales represent a feasible reality – although some retailers have made the leap, or they’re at least planning to. The One Voice Report revealed 12.9% of respondents had already implemented a fully online second-hand vehicle sales process, while 11.4% were considering doing the same this year.
Online used car sales do happen, but they’re very much a minority, although dealers believe they will gain greater traction in the future.
“Eventually, people are going to trust [online buying] and think, ‘I am going to click it and if it is no good, I can send it back’, instead of going to the dealership and having that experience,” said Kim Chodha, owner of Berkshire-based dealer Sascron Car Supermarket.
“We are going to try to implement that, but click-to-buy is probably a little bit down the road. When you do that and the car is all good, it is going to take away a lot of the stress. You will just need compounds [where you can store a large number of vehicles].”