Online Car Sales Are Changing How Cars are Sold, Maybe Forever
Scotty Reiss
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But is it safe to car shop in a pandemic? Here’s how it works, and what you need to know.
Deals on new cars may be the best ever, and it’s driving people to shop. But, afraid that many customers would draw the line at going into a dealership, or state laws that limit a dealership’s ability to open their showrooms, the industry is quickly changing the way they do business.
Traffic to dealers lots and websites is strong right now. There are buyers who “need a car because theirs isn’t working, or got into an accident, but also there’s a group of opportunistic buyers who want the deal, the rebates” said David Regn, co-founder and CEO of automotive advertising company Stream Companies.
So, how do dealers conduct business while socially distancing and being responsible in a pandemic? Consumers are conducting “touchless transactions” at grocery stores, pharmacies and restaurants. Can car sales go touchless too?
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“Can a transaction even really be touchless?” questioned Regn, who noted that many states require a ‘wet’ signature, or a signature with a pen, done in person. It’s usually not the dealer that insists on a wet signature for a sale or lease, notes Tony Depaquier, executive director of dealership financial training and consulting firm The Academy. These are often state regulations, finance company rules or requirements by state DMVs. “When this changes it’ll be a game changer. The mortgage industry allows this but the auto industry does not,” he said.
“We have had digital retailing tools and a process in place, but customers were using it as a payment calculator, so we weren’t seeing a lot of people who wanted a pure touchless transaction,” Regn said. “They wanted to pick out the car, test drive it” and drive it home. But dealers are resourceful, he noted, and he expects more and more dealers to implement new ways of doing business.
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Despite the challenges, many dealers are moving quickly to create a touchless, or as touchless as possible, process. “We have seen a tremendous number of dealers that have adapted to the situation as it continues to change. As slow as the auto industry is to make a change, dealerships have adapted amazingly fast out of pure necessity,” said Tony Depaquier.
Some “dealers in Massachusetts and Rhode Island are implementing a new process starting May 1st that will have complete touchless transactions in a couple of unique ways” said Regn. The dealership group 24 Auto Group will have a test drive process that involves walking customers through the process on the phone, bringing car to the buyer and sanitizing it before the buyer arrives.
When customers come to the dealer to sign the paperwork and pick up the car, “the dealer will do as much touchless as possible, such as setting up outdoor tents so customers will be able to sign the paperwork. The car will be cleaned and ready so [the buyer] can just get in and go,” said Regn.
“The reason we have been able to adapt is because we already had everything in place. Dealers may have not known how to do all of it, but they were doing some part of it” before the pandemic hit, Dupaquier said. So they were able to quickly set up new processes.
Online tools buyers can expect to use to buy a car include email, text message and phone calls, as well as meeting platforms like Zoom or Fuze for everything from walking around a car and showing the customer all the features to completing the paperwork and explaining all the details.
Many dealers will “do as much of the paperwork electronically as possible, using Docusign, and if wet signature is required they have dedicated a table at the dealership” often outside. When a customer arrives to complete the process, the dealership rep, in a mask and gloves, will put the documents down, provide specific instructions for signing and often even give the customer the pen they signed with said Dupaquier.
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Many experts agree with Dupaquier that it’s the “smaller dealership groups [that] are more easily able to adapt” to online car sales and touchless transactions. They can make fast, agile decisions, unlike bigger companies that have more elaborate business processes.
“We’re doing what customers wanted all along, and showing clients we can be more personable than large big box retail outlets,” said Tyler Pelham, general manager of Luxury Auto Works in Austin, who has pivoted the used car dealership’s sales process from primarily in-person sales to as touchless as the customer wants. The process can start with an at-home test drive– once the customer provides ID and insurance– which seems to be very popular, Pelham said. If the customer decides to make a purchase, “documentation is completed via a mixture of paper and Docusign forms depending on laws and regulations. Once fully signed, the vehicle is sanitized using industrial grade equipment, made ready and delivered. We let the client decide if they want assistance setting up the vehicle or a contactless delivery – drop and leave,” he said.
Texas dealers such as Covert and Continental in Austin, Cavender Auto Group in San Antonio and Park Place in Dallas Fort Worth have all adapted these processes to make the process as easy as possible for customers.
Putting community first, Dennis Automotive in Ohio was quick to set up socially safe and responsible processes, such as limiting the number of people in the dealership at a time, appointment-only meetings and now, more online processes to facilitate transactions.
What Are Dealers Doing Differently That They’ll Keep Doing When This is Over?
It’s a question we hear a lot when we chat with friends or colleagues: What are you doing now that you’ll keep doing when this is over? People often answer with Instacart, curbside pickup and home delivery of goods.
And, as consumers learn they can negotiate for a car purchase over email, walk through the details on FaceTime and the paper work in a Zoom meeting, will these practices continue in the future?
“There’s nothing that dealers are doing now that won’t help them in the future, that customers won’t want to take advantage of,” said Joe Webb, president of training and technology company DealerKnows and Women in Automotive board member. “I fear dealers will say when this is over ‘we don’t need to do at home delivery’ and that will set them back.”
Many car dealers and buyers are expected to implement these processes for the future where customers want it. “I think it’s ‘buy your way’ going forward,” said Regn.
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Touchless Transaction Checklist
If you’re considering buying a car online, here are the things you should do or look for in navigating a purchase. After researching the car you want and the dealers (always look for more than one) that have it, start with an email or a phone call and look for the following:
- Will a dealership employee do a video walk around of the car (FaceTime, Facebook messenger and Skype are good ways to do this) so you can see the car and ask questions?
- Will the dealership bring the car to you for a test drive?
- If not, or if you prefer to go to the dealership, will they provide the car, sanitized and ready to go, in the dealership parking lot for your test drive?
- Will the dealership walk you through the paperwork process via a video meeting?
- Can the dealer provide a checklist and all documents for your review via email, DropBox or other digital process?
- Can you Docusign or electronically sign the paperwork?
- If you must sign in person, is the dealership prepared to offer a safe, sanitized and socially distanced place to do this?
- Does the dealership make appointments for test drives and finalizing a sale?
- And, is the entire transaction consistent and transparent?
Online car sales should make buying a car easier, but buyers should still be careful to double check every document to ensure they are getting what they want. And what’s the one thing buyers should look for when getting the paperwork electronically to ensure they are clear on the terms? “Disclosure of vehicle cost, principle and interest – or lack of,” with so many 0% interest offers in the marketplace right now, said Dupaquier. Buyers should be sure they know “what base payment is,” he said.
And, buyers should be able to buy a car in a way that makes them feel safe and comfortable, even in a pandemic.