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Virtual test drive is a poor substitute for the real thing - Mar 08, 2008
U.S. automotive group, AutoNation, recently announced plans to create a new website, in partnership with a large retailer, which will allow customers to buy cars entirely online. This site will target individuals who eschew the traditional car-buying experience.
AutoNation already has a website where consumers can buy cars online. The site offers vehicles for a set price, accepts trade-ins, processes the paperwork, and even arranges delivery of cars right to customers' homes.
I acknowledge that there will always be car buyers who would rather not visit a dealership in person. I'm sure that many purchasers would love to negotiate/buy online if they could avoid visiting and negotiating a purchase at a dealership.
Will this online model fly? In my opinion, some buyers may find the online method preferable to the traditional model. But for the majority, the Internet won't replace the traditional dealership experience any time soon.
In the mid-1990s, as the Internet took off, several doomsayers predicted the demise of automotive salespeople; they said consumers would start buying cars online in droves. New companies were formed to take advantage of this expected shift in consumer behaviour.
What happened? Rumours about the end of car salespeople were greatly exaggerated. Seems that when given a choice between buying cars online and visiting dealerships in person, consumers overwhelmingly chose the latter.
I believe the Internet will continue to provide a rich source of information about different automotive brands, features, pricing and auto shows (where consumers can check out competitive features in a hands-on environment).
But buying a car worth $25,000 or more, online, without stepping foot inside a dealership, doesn't make sense to most consumers. Music, books and concert tickets are commodities that are sold every day over the Internet.
But cars aren't commodities. Consumers want to sit inside cars and experience how they handle. For instance, sport suspension sounds great, and with some manufacturers it is. With others, the experience is jarring and takes away from the pleasure of the drive. Without a chance to test-drive the vehicle, a customer could be unhappy with the purchase.
I've heard about technologies and websites that allow people to virtually test-drive vehicles, while sitting in front of their computers. As cool as this sounds, it doesn't compare to the real thing.
Plus, when a customer buys a car in person, he or she begins a relationship with the dealership. This relationship is necessary because all vehicles require regular maintenance.
Establishing a relationship with a click of a mouse is much more difficult.
Maritz Research recently reported that Canadian consumers increasingly rely on salespeople at dealerships when buying cars.
Fifty-six per cent of car buyers polled said that a salesperson at a dealership was their main source of information (an increase of 3.3 per cent from 2004).
Another reason I think customers will avoid the online buying model is because of the "customer focus" aspect of dealerships today.
Dealerships have invested millions upgrading their facilities in an effort to make customers feel welcome and comfortable.
Customers clearly appreciate the red carpet treatment. Most new-car dealerships receive dozens ? if not hundreds ? of letters of thanks each month from customers who have had great buying experiences.
These letters are a ringing endorsement of the positive dealership experience.
The online car-sales model may be a novelty or a preference for some. But most buyers still want to drive their dream cars for real before making a buying decision.
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