buying Coronavirus has dealerships moving to online sales — and car buying may never be the same
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The way we buy cars may never be the same, as auto dealers adjust to working under COVID-19 restrictions and customers discover they prefer the new approach, which leans heavily on internet sales and vehicle demos and could include valet-style pickup and delivery service for everything from test drives to oil changes.
“This is going to fundamentally change how people view buying a car,” said Rhett Ricart, CEO of Ricart Automotive Group in Columbus, Ohio, and chairman of the National Auto Dealers Association.
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“By the end of this year, you’re going to see 80%-90% of U.S. new car dealers with full e-commerce capability in their shops” to handle everything online but the test drive and — maybe — the final signature, he said. Online deals at Ricart’s domestic dealerships have doubled during the last six weeks, he said.
In Michigan, Gov. Gretchen Whitmer’s extended “stay home” order clears the way for that, after a month when nearly all vehicle sales were prohibited in the state. It allows:
“Workers at motor vehicle dealerships who are necessary to facilitate remote and electronic sales or leases, or to deliver motor vehicles to customers, provided that showrooms remain closed to in-person traffic.”
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Michigan dealers have been hoping and making plans for just such a change. Deliveries could begin as soon as they work out a process that addresses all the legal documents that are part of buying a vehicle.
“We’re seeing a fundamental change in the way cars will be sold,” said Doug North, owner of North Bros. Ford in Westland and chairman of the North American International Auto Show.
“This pandemic is going to create some permanent changes.”
Who’s Zoomin’ who?
Going totally online and paper-free will require changes to laws that require physical signatures. But North thinks the government is open to the idea, particularly at a time like this when a slowdown in taxes from auto sales adds to the stress on state finances.
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Eagerly awaited first quarter sales reveal the extent to which COVID-19 is wreaking havoc on car buying in the U.S. Stay-at-home orders prompted by the spread of COVID-19 have brought economies to a screeching halt and first-quarter auto sales are the first indicators of how detrimental the disease has been on car buying.FCA has reported a quarterly decline in U.S. sales of 10.4 percent. Hyundai saw its March sales drop by 43 percent.This page will be updated as companies report sales numbers.U.S.
In the meantime, dealers are stepping up their online efforts to schedule test drives for as early as the rules allow.
Customers can reserve a specific vehicle from inventory to buy or for a test drive, said Ryan LaFontaine, chief operating officer of LaFontaine Automotive Group, which handles 18 brands in southeast and mid-Michigan. LaFontaine has staff manning its websites and phone lines during the current near shutdown, which has limited Michigan dealerships to service, repairs and sales to first responders who need a new vehicle pronto.
“There’s a new norm,” LaFontaine said. “All dealers are being forced to adapt. We’re refining the process now to sign and finalize the deal off-site.
“People are changing their buying habits. Online platforms are as important as brick and mortar.”
LaFontaine produces online “Motor Minutes” to explain new features. The company is piloting Zoom for live walkarounds so sessions touching on every aspect of a new vehicle aren’t far away.
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“It’s really important for the customer’s long-term satisfaction that we describe at least the basics of a vehicle’s technology and safety features,” North said.
Less time at the dealership
North described a process in which a buyer might come to a virtually empty dealership to sign for a car they’d picked, priced and financed online: "Everything they touch will be freshly disinfected. If the customer uses one of our pens, they’ll take it with them when they leave.”
Buying research website Autotrader just launched Dealer Home Services, a set of online tools for "no contact interactions" and to schedule test drives, pick up and delivery.
Two out of three customers care even more about the time it takes to buy a car — particularly negotiating price and signing paperwork — than how much they pay, according to a recent survey by Cox Automotive, which owns the Autotrader and Kelley Blue Book buying websites. The report said customers spend an average of three hours at a dealership to buy a car and 2½ for basic maintenance.
The biggest consumer frustration with the auto experience relates to time and convenience, Autotrader senior analyst Michelle Krebs said.
Online research into vehicles and prices makes shoppers better educated than ever before, Ricart said.
“This is where we’re headed. Customers have always wanted quicker interactions, and now, the change is accelerating exponentially.”
This article originally appeared on Detroit Free Press:
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