Move cars off the lot faster than you can drive them
You already know car buying trends have changed a lot recently. Here are some of the numbers behind the trends.
Since the beginning of 2020, you’ve seen some big changes in car buying trends. If you just skim the news, it seems like Covid turned every household in North America into a secret society of online used car buyers, and new car manufacturing was nearly wiped out.
Indeed, national and local shutdowns and uncertainty played a significant role in auto industry changes, just as they did in the overall economy. However, we also know that new vehicle manufacturing has been a centerpiece of national news for decades as factories open or move or shut down.
But what has really changed? Are there car buying trends you need to pay attention to as a used vehicle dealer? Or is it just another day at the office? Let’s rev up those engines and find out.
3 Car buying trends you may (or may not) need to worry about
1. Online buying has increased. Autotrader reports that “2 out of 3 shoppers are more likely to buy the vehicle 100% online.” Just to make things confusing, however, a survey by Deloitte found that only 29% of buyers would prefer to buy their next vehicle either fully or partially online. That same survey reveals the top two reasons people prefer to buy in person is that they want to see the vehicle (75%) and take a test drive (64%).
What’s the reality? According to ABC News, “nearly 30% of U.S. new car sales […] were completed online.” That number is much different for used vehicles. Modern Retail reports that fully online vehicle purchases only accounted for around 2% of used vehicle sales.
The trend is growing, though. In 2017, only 3% of car buyers were looking at online car dealerships, while in 2020, that number rose to 17%.
2. The interest in electric vehicles is rising. While many used auto dealers are still primarily buying and selling gas and diesel-powered vehicles, there are some clear car buying trends that suggest now is the time to start preparing to sell electric vehicles. McKinsey & Company report that between November 2020 and June 2021, the “purchase intent” for EVs rose from 39% of car buyers to 48%.
Again, though, what is the reality? According to the Pew Research Center, since 2016, the number of electric vehicles registered in the U.S has more than tripled. Most of those vehicles, however, are close to major metropolitan areas where public charging stations are available.
3. At-home delivery and test drives are becoming standard. There’s no getting around the convenience of having a car show up in your driveway that you can test drive for 48 hours before deciding whether or not to buy. A Google survey found that an at-home test drive was the number one preferred service of auto shoppers, while a CarGurus study revealed that 32% of consumers expect an at-home test drive and 30% expect at-home delivery of a purchased vehicle.
You don’t need to look far to see the reality of this. Just look at the number of curbside pickup and contactless delivery options available everywhere, from your favorite restaurant to big box stores. You can find contactless check-in at hotels, and, of course, the growth in grocery delivery services is evident.
And in the auto sales industry? A quick glance at online search results makes it clear that this is one of the car buying trends that auto dealers are working to accommodate. New and used car dealers are both offering vehicle delivery services and a variety of test drives. Some will drive the vehicle to the customer’s home and wait while they take the car out for a spin, while others offer 24-hour test drives or 7-day money-back guarantees.
What do car buying trends like these mean for used automotive dealerships? You might be able to hold off for a while on working to bring electric vehicles into your dealership, although that would put you ahead of the curve. But when it comes to online shopping and at-home test drives and delivery, it’s clear that these trends are growing quickly.