Why don’t we buy more cars online in the UK?
That’s a reasonable question. After all, we buy pretty much anything on the web these days: Beauty products and CDs, televisions and clothes, food and kitchen accessories.
But with cars, it’s different.
Are you considering buying your next car online? If you want to find out what the best place to do this is – read on!
How important are online car sales right now?
Recently, a poll established that when it came to new cars, willingness to buy online was well under 10% (in fact, in some markets it was as low as 3%).
Obviously, that number is a lot higher when it comes to used vehicles. But it’s still lower than you’d expect.
Clearly, consumers aren’t entirely ready for the idea yet.
In a way, that’s only natural.
Today, we feel perfectly safe buying most products online.
This is because
- most of us have gathered plenty positive experience in the past,
- some products can only be found on the web these days but we do need them,
- customer reviews offer a degree of useful hands-on experience with products and services,
- consumer protection for products bought online is higher than for those bought in store,
- the industry has become more professional and there are very few black sheep anymore,
- the risk of a financial disaster is low thanks to buyer protection from platforms like paypal or credit card companies,
- the cost of most products sold online isn’t very high to begin with.
Cars tick almost none of these boxes: Online car deals are still fairly new, you have plenty of alternatives, consumer protection for cars is great either way, cars are extremely expensive and if there are any black sheep to be found in the industry, we suspect there are more of them online than offline.
That said, there’s a huge difference between new cars and used cars when it comes to buying online.
Thanks to these reasons, the market for used car sales is expanding fast. Although it is still smaller than dealership sales, which take up almost 60% of the market, it is becoming more popular.
Obviously, used cars are far less expensive, which makes them far less risky to buy. On the other hand, gauging their quality is a lot harder. Which, in turn, increases chances of a lemon.
But this alone doesn’t explain the surge. There are more points, which we’ll get into very soon.
One thing’s for sure:
Dealers are urgently preparing to enter the digital world!
One word to explain this trend: Covid.
A recent Statista survey analysed the pre-pandemic and current level of willingness to buy an automobile online. Although the survey doesn’t mention this, it is almost 100% certain, that this percentage relates to used cars mainly – or at least includes both new and used cars.
That percentage has risen by 20% over the past two years, and now stands at a remarkable 63%.
Already, the market is moving away from somewhat unreliable private sellers to more professional, trustworthy companies. Since online always promises lower costs, it is only a matter of time before those 63% make true on their willingness and actually start carrying out transactions for real.
If dealers want to compete, they will have to go online.
And they are. Car dealer magazines are reporting on the topic. Advisers are setting up strategies to support the transition. And more and more, you can find dealerships complementing their physical showrooms with digital ones.
At Concept Car Credit, we’re no different.
Our Manchester showroom is as busy as always and we are always there for our customers on location. At the same time, many of our deals are also available via our online car showroom. You can even apply for car finance through the site in an extremely convenient process.
And then there’s Tesla.
Not only has Elon Musk paved the way for electric cars as a mainstream mode of transportation. He has also laid the groundwork for buying new cars online.
The Tesla strategy to car selling is a thoroughly modern one. You can look at prospective cars in physical showrooms. These are no longer situated outside of the city, but actually in shopping malls or in busy inner city centres. Which means they’re far more attractive and offer an entirely different shopping experience.
No, you won’t be able to take a test drive quite that easily. Instead, you can use virtual reality goggles to get a pretty realistic impression of what driving a Tesla would be like.
And the actual process of ordering is merely the end of the procedure. Before that, the experience resembles the traditional dealership process in most respects. You can ask questions, look at and even touch the car, get to sit inside and much more.
It’s not perfect. But it’s definitely an important step forward.
So, what are reasons for buying online?
For the moment, buying new cars online is still a niche. So let’s focus on used car sales.
When it comes to private sales, we can identify a few arguments in favour of searching for vehicles via the web:
- You should be able to get the lowest possible price.
- You can talk to the previous owner and ask personal questions. To some, this is an important aspect for finding out more about the car in question.
- The choice of models is huge.
- It is easy to compare these choices.
- In our opinion, you can sum up the benefits of buying a car privately online as follows:
If you are looking for rock bottom prices and actually prefer a somewhat older, cheaper and less fancy model which doesn’t need to be in pristine condition, the digital market place may be ideal for you.
That said, private sales have their downsides.
And believe us, some of them aren’t pretty.
For one, it is true that you can ask the previous owner questions. But will you get honest answers? Dealerships have a lot to loose from not responding truthfully, because consumer protection allows you to return the car in case of serious issues. The same does not hold true for private sales.
Cars sold privately vary wildly in terms of their quality. You can get lucky. But don’t count on it. Disappointment is always around the corner. If there’s a really great deal, you may be able to shoulder the risk. But if you’re going to spend a few thousand Pounds – shouldn’t you be able to at least have a rough idea of what you’re spending it on?
That huge choice can work against you.
You’ll soon find that you’re easily overwhelmed by the sheer amount of vehicles on offer. To make matters worse: Everyone is constantly monitoring their deal alerts, ready to pull the trigger 24/7. When you do get that notification that your dream car is available, you may need to act quickly. Sometimes, that’s for the better. But it can also result in rash decisions.
It’s time consuming, too: Just imagine having to inspect dozens of potential cars before finding one that’s right for you!
This is why some drivers are buying used cars from dealers with an online website.
But is buying online from dealers actually cheaper?
This is a tricky, albeit important question.
There are subtle, yet meaningful differences between transactions carried out via private online sellers, online dealers or platforms and traditional physical dealerships.
Private sellers can potentially offer you the best possible price. But you may sometimes have to haggle hard to get it. Plus, you run the risk of having to fix or even repair a few things after the sale, which, in turn, raises the overall costs.
Online dealers are more expensive than this. The way things usually work is that you can ask the responsible sales manager for a discount online. He will let you know if you qualify for it and how much you’ll save. There is no haggling, though.
That may be good news for some. But it does mean that traditional dealerships can actually be considerably cheaper than online dealers. Here, you’ll have to do some hard talking. Your wallet, meanwhile, may thank you for it.
This is why traditional dealerships still have the upper hand.
The traditional way of buying a car may feel a bit dated. But it’s there for a reason. Or rather, it’s there for many reasons at once.
Traditional dealers offer a decent choice of models in at least decent (and probably better) condition. They can give you satisfying responses to your questions and will pretty much guarantee that you won’t be buying a lemon.
You can test drive cars that interest you, take a closer look at them, inspect them.
You can expect all the paperwork to be in order. Dealers will take care of almost everything in this regard. Which means you can simply drive off the lot without worrying about formalities.
Importantly, the buying process is much faster these days than it sometimes was in the past. If you really urgently need a vehicle, classic dealerships are just as fast as a private seller.
And then there’s finance.
Whenever people compare private sales versus dealership sales, they often forget the question of financing. This, clearly is a mistake.
If you can comfortably pay for a used car out of your pocket, that’s great. But that’s not very likely. Rather, most of us will need some form of loan to be able to pay for our cars.
With a private sale, the traditional bank loan is pretty much your only serious option. And the problem is that it is not your cheapest option these days and carries a higher risk of rejection than car dealer financing.
At Concept Car Credit, for example, we will always try to make your application work. We don’t actually look at your credit score foremost. Rather, what interests us is your income and your monthly spendings and what you will be able to afford.
Based on this, we can set the monthly repayment and calculate a fair interest rate. This is not something you can expect from a bank.
The future? Online and digital will merge.
It seems pretty obvious that online car selling and the dealership model stand to benefit from each other. And so, these two will eventually merge.
Which means that you can either
- buy your car at the showroom, just like you’ve always done,
- complete the transaction online, or
- opt for a combination of the two: Looking for the car at the dealership and then ordering at home online.
At CCC, we welcome you to our showroom, but also offer plenty of models in our digital showroom. Visit us now, regardless of your preferences and don’t be shy to ask, either through our contact form or by phone at 0800 093 3385.
We look forward to hearing from you!