“People want to see, feel and touch the car,” says Erin Lomax, vice president of consumer marketing at Cox Automotive, a research firm that also creates digital auto sales products that allow dealers to initiate transactions online. (This gives Cox a lot of insight into purchasing patterns, but he also has a stake here.)
Not to mention test-driving an expensive thing they’ll probably use every day. Data released by Cox this month shows that while 28 percent of car buyers enter the transaction thinking they want to do the whole thing online, only 7 percent actually do. More than half of shoppers make their purchases entirely in person.
Another consumer survey published in the autumn found that more than half of car buyers wanted to physically sign paper copies of important documents. In another survey released in December, 86 percent of buyers surveyed said they wanted to see the car in person before finalizing their purchase.
Despite this, it seems the industry is making a full-scale push to bring car-buying online, which began out of necessity when the Covid-19 pandemic and related shutdowns limited in-person interactions. The direct-selling success of automakers including Tesla and Rivian, and online-first used car merchants including CarMax and Carvana, have also given the practice some momentum. Dealerships and used car sites have introduced waves of technology in recent years — including significant backend connections between financial institutions — allowing more and more transactions to happen with a series of clicks or taps.
Last summer, Hertz launched a completely online car buying platform, allowing customers to pre-qualify for a loan, evaluate a trade-in, choose a warranty, and ultimately arrange a pickup over the Internet.
However, it turns out that the whole buying a car online thing is subtle. It is not that people are completely avoiding the Internet. In interviews, buyers told Cox they are happy they can do many of the processes — especially applying for loans and getting approvals — online. One described a “seamless” transition between researching online and selecting a car, then going to the dealership to finalize the deal.
Lomax says Cox has found that Internet-enthusiast buyers make their way to brick-and-mortar dealerships when they reach the financing portion of the transaction. “They found out by actually looking at the inventory online,” she says. “The steps related to money and financing—that’s where the anxiety comes in.”
The auto industry sees big potential in assuaging that concern, especially for Americans who aren’t comfortable with the wheeling and dealing that happens at some dealerships. Amazon’s auto division, launching in 2024, lets consumers research and sometimes finance vehicles online, then ship them to a local dealership to get the work done. The company declined to share figures, but spokeswoman Jessica Faison said in a written statement that Amazon is “very encouraged by the strong positive response.” (The company notes that customers often browse Amazon Auto in the evening, when dealers may be closed.)
Vehicle manufacturers are also coming to the Internet. In the fall, Ford joined Hyundai in allowing car buyers in select U.S. cities to buy certified pre-owned vehicles on Amazon’s giant online sales platform. Ford CEO Jim Farley vocally praised Tesla’s direct sales approach, which skips the middleman dealerships entirely. “We have to go to no-negotiation pricing. We have to go to 100 percent online pricing,” he said at a 2022 event, referring specifically to EV sales strategies.
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