Home Articles COVID-19 May Lead People To Online Car Purchases

COVID-19 May Lead People To Online Car Purchases

COVID-19 is probably the single most terrifying event that we have witnessed in our lifetime and it is slated to change the very fabric of what we consider normal.

Essential items are something that is becoming scarce by the minute and the impact this has on the global economy is beyond belief. It is almost considered a sin to even think about the consumption of convenience and luxury goods at this stage.

One such industry that has faced severe blows due to the COVID-19 pandemic is the automotive industry. In the United States auto market alone, car sales have declined by almost 37% and the downward spiral is set to be even more devastating as time goes by.

This sudden drop in demand by the consumers means that the dealerships are being strangulated to even meet overhead costs as now it becomes crucial for them to adopt measures to keep their businesses afloat while we are under attack by this horrendous virus.

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Even though car dealerships are open, the shelter in place orders has more or less made it impossible for the dealership to sell vehicles, at least using the traditional route. In the past couple of years, Tesla and Carvana had definitely tried to push the idea of bringing the car buying experience up to modern standards by digitizing the experience altogether but as is nature, the process didn’t find many takers.

As of now though, shifting to an online presence doesn’t seem much like a choice anymore but a necessity since honestly no one knows how long it would take for everything to fall back to normal and this pandemic to blow by us.

Michelle Denogan, Chief Marketing Officer at Roadster, estimates that only a mere 20% of the total dealership had any form of online shopping tools available pre-pandemic but in the very first week of the rise of COVID-19, Roadster had their call registers ring up to 4 times more than regular and the manufacturers and dealerships demanded guidance to switch over to a more sustainable sales interface.

It is also expected by Rhett Ricart, Chairman of the National Auto Dealers Association, that almost 90% of all dealerships would switch to complete e-commerce capabilities by the end of this year. It isn’t a statistical number that we doubt since it would be suicidal for dealerships to bet on the fact that normalcy would return anytime soon.

Shifting to the e-commerce business model does have it’s own sets of problems as most people would prefer a test drive before finalizing their purchase and modifying the test drive experience to suit the e-commerce model could prove to be tricky, but some websites like Carindigo.com has such a unique experience that it delivers everything you need to buy a car.

Yes, the dealerships could always pick and drop test drive vehicles at the prospective customer’s house, but this activity would involve serious capital to increase the test drive fleet and also raise the logistics cost of the entire activity. Another big barrier comes in the form of the payment process for a vehicle as most American buyers tend to take out a loan to buy a vehicle or settle for a lease.

This means that they would need to sign documents online which unfortunately isn’t permitted by many states even though you can e-sign your tax returns. Roadster, therefore, is tediously working with dealers to help dial in the online car buying process for the social distancing environment.

Carvana has also recently introduced a no contact pick up and delivery system for a vehicle where the customer signs the document upon the delivery of the sanitized vehicle while the delivery driver waits at a safe distance ultimately for the customer to deposit the signed documents in their mailbox to be retrieved by the driver.

A very prominent advantage that tools such as the ones offered by Roadster would provide the dealerships is the amount of received data regarding a potential customer’s search history that could help gauge them the mindset and preferences of the new customer.

In a world where vehicles don’t really make sense as stepping foot outside your home is somewhat of a luxury, it is going to be very difficult for manufacturers and dealerships to maintain a working business model that not only overcomes these dire circumstances but also keeps them prepared for a different sales experience even when the world reverts back to “Normal”.