Buying a car – like seemingly everything else in the retail world – is increasingly moving to the internet.
“Walking in” still is the most common point of contact among buyers and sellers, but a 2018 study published by Cox Automotive shows a growing number of consumers are researching and considering making purchases online. More than three-quarters – 78% – of buyers looking for new or used cars started shopping on third-party websites such as Cars.com or AutoTrader.com, according to the study.
Researchers also found buyers are spending more time online and away from dealerships when deciding what they want to buy.
It's a trend that's made its way to northeast Indiana, and leaders of local dealerships say they have seen an increase in deals made online and without face-to-face meetings in recent years. Most in Allen County still require some form of in-person interaction – lots of paperwork must be signed, after all – but dealers constantly are working to widen their digital footprints and accommodate buyers more comfortable in a digital showroom.
Jay Leonard owns Preferred Auto, which operates three locations in Fort Wayne. Leonard likens the phenomenon to searching for any other wanted or needed retail item.
“You can't find it? Look online,” he said. “The same thing's happened in the car business.”
Preferred Auto's website is similar to others run by area dealerships and third-party sites. Buyers can search by make and model; they can narrow searches by price and dealer; and a pop-up window asks virtual visitors if they have questions.
Local websites also offer tools for buyers to calculate financing options and complete credit applications.
Work to create and maintain the sites is necessary, dealers say, because that's what the market demands. Even if buyers still shake the hands of salespeople and sign the final paperwork at brick-and-mortar stores, they want to research – look for the type of car they want, find the perfect color, compare prices – before they arrive at the dealership, they say.
And that has changed the car sales dynamic. Where once sales staff held most of the information on what cars were worth, their durability, their trade-in value – consumers now have access to the same data.
“The biggest difference today is people that come into your showroom have so much more knowledge,” said Adam Sauerland, general manager at O'Daniel Automotive Group, which sells Audi, Chrysler, Ford, Porsche and other brands.
He said buyers, armed with information, often enter the dealership knowing what they want and how much they are going to pay. In the past, there was more discussion between them and salespeople.
Jason Wolfe is one of the buyers who knew what he wanted. The only question was how to get it – so he looked online after his fiancée said she wanted a convertible.
The couple settled on a Audi A4 cabriolet for “safety, reliability, and cost – plus the fact I am familiar with the cars,” Wolfe said in an email, noting he's bought cars online in the past.
He didn't go through a dealer, though. Wolfe instead searched for cars from private sellers, which comes with some risk.
After visiting a warehouse outside Chicago where they were shown a damaged car, he found the vehicle he and his fiancée wanted at another seller's nearby.
“After two test drives, I offered $4,500 cash,” he said. “We loaded the kids up and drove it home with the top down. Out of our five cars, this is our favorite.”
Dealers in Fort Wayne say buying from established auto outlets removes some of that guesswork. Wolfe's experience also illustrates a reason most buyers end up at the dealership, even if pre-purchase research was online.
“The problem is, aside from a house, buying a car is most likely going to be the second largest purchase they will make in their lifetime,” said Chad Probst, general manager at Vorderman Volkswagen. “With that said, customers still want to see, test-drive, and feel out a car before they pay for it, in most cases.”
Leonard, of Preferred Auto, agrees.
“Ninety-five percent or more still want to come in,” he said.
Probst, who has been general manager at Vorderman about five years, estimates 80% to 90% of the dealership's business “comes from online in some sort of fashion.” The dealership is developing an app where potential customers can peruse options.
“A customer can go through all the steps online to buy the car, but they have to come here to sign the paperwork,” he said.
Sauerland, of O'Daniel, said his staff recently sold an Audi A8 to a customer on the West Coast. The customer inquired online and he and the dealership sent paperwork back-and-forth to be read and signed.
Such transactions are more common with higher-end cars, Sauerland said.
“There's a lot of customers that we never meet,” he said.
Despite the rise and growth of the digital auto marketplace, sellers don't see their showrooms or service departments going extinct. Customers still want to check their purchases out before driving them, and they'll need a place to have them worked on or their oil changed.
“I would rather them come to my store,” Probst said. “I want to be able to show our customers why our car is the car (they want).”