Online vs. In-Store: The New Car-Buying Model

In a recent article, Digital Dealer put together some information about the car-buying habits of today’s consumers that is critical to the industry moving forward. They conducted several surveys and gathered a wealth of information about what people want in their buying experience, and what they list as the biggest pain points today.

It should come as no surprise that high-pressure sales tactics, pushy sales people and bait-and-switch style advertisements are among the biggest annoyances. But of particular interest to the F&I segment of the industry, “pushy finance managers” were listed in the top 5 right alongside those other frustrations.

The study also found that, overwhelmingly, consumers want more information before they even walk through the door. A staggering 98{137f86425451f0eed4391b215cab1f0aedcc26ced4aeb45d9a5267c3194b8614} of all car shoppers are researching their cars online before ever stepping foot onto a dealer lot, and they are spending anywhere from two to eight hours comparing models, features and financing options.

The survey found that 76{137f86425451f0eed4391b215cab1f0aedcc26ced4aeb45d9a5267c3194b8614} of shoppers reported higher satisfaction with their car-buying experience when they were able to do all of their pre-buying research online. But on the flip side, consumers still want aspects of the dealership experience — 56{137f86425451f0eed4391b215cab1f0aedcc26ced4aeb45d9a5267c3194b8614} of those surveyed want to finalize their sale in the physical dealership, rather than complete the entire process online. Consumers still want to see and touch their potential new cars, take them for test drives and have a salesperson there to answer any questions.

But the ability to research every aspect of the sale, and even negotiate the price and complete some of the paperwork to reduce the amount of time they need to spend in the dealership, are fast becoming services that will enable individual dealerships to stand out from the crowd. Consumers want to work with dealerships who embrace digital technologies and who find ways to seamlessly integrate them into the car buying process, reducing or removing the pain points altogether so they can enjoy the excitement that comes with purchasing a new vehicle.

So what does this mean for the automotive industry moving forward?

The biggest takeaway from this study – for the F&I department in particular, and the automotive industry as a whole – is that we can’t be afraid to embrace new technologies. However, consumers aren’t clamoring for a total overhaul of the entire process either. A willingness to offer more online tools and more information prior to the sale won’t mean fewer consumers walking in the door — it might actually lead to more consumers who are willing to trust their final sale to an organization they believe “gets” them.

And there’s a strong opportunity hidden here: we all know that F&I products are an important contribution to dealership profits, and that consumers are more receptive to the car-buying experience when they can research information online in advance – yet there is a notable lack of F&I product information on dealership websites. It’s time to connect those dots.

As an industry, we need to embrace the newer technologies instead of fearing them, and we need to continue to streamline the in-person process so consumers feel comfortable throughout the entire thing. Too often in the debate, it comes down to an either/or situation — we either sell cars completely online, or we use no online tools and continue to conduct the entire transaction in person. But it doesn’t have to be that way. The future will be a blend of the two approaches, and those who figure out the best way to do that will be the true industry leaders of tomorrow.

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