Whether it is purchasing your first car or upgrading to a better one, buying cars is always a momentous occasion for all. After all, not only is it a hefty financial investment, the vehicle you drive is an extension of your personality. This is why some prefer certain car models over others.
If you love your car, you are certainly not alone. According to Statista, in 2021 alone, over 70 million cars were sold! The demand for cars is on the rise. A McKinsey study revealed that one-third of young consumers now value access to private vehicles post COVID-19.
However, the fact remains that car buying is quite a bumpy road! However, slowly the world of car buying is being revolutionized. As different technologies and solutions enter the horizons, car buyers of today have various avenues of purchasing vehicles. This is likely to increase even more in the future.
Here are some of the likely trends of the future of car buying.
Online car buying
The pandemic further accelerated a trend that was already gaining pace – online shopping. According to Optin Monster, the digital buyer penetration rate stands at 47.3 percent as of 2018. There are estimated to be approximately 1.92 billion digital buyers in the world!
The online world is already an important part of the car buying process. When purchasing a vehicle, the first thing most people do is research different options online. In fact, people spend an average of 7 hours and 14 minutes researching a vehicle!
It comes as no surprise then that the world is slowly moving towards digitizing the entire process. Even now, there are many online car selling platforms and apps that allow shoppers to view and purchase vehicles online.
This is an excellent trend, considering the convenience of online purchases. Additionally, it also eliminates the influence of car dealers on consumers – ensuring that they make a decision that is in their best interest.
The rising online car buying trend is likely to affect consumer behavior well beyond providing a convenient platform for users. It is likely to provide consumers with insightful information that they didn’t have access to before – the market value of different vehicles, whether they are new or used.
This wealth of information can then be used by consumers that prefer purchasing from physical dealerships to cut a deal without paying heed to the haggling salesperson. One of the biggest reasons car dealers are able to get away with selling a vehicle at a high price is because of the lack of knowledge of consumers.
With this barrier to information gone, car buyers are likely to make better purchase decisions in the coming future.
Apart from the medium of purchase, the medium of transaction is also likely to be expanded in the future. In the past few years, cryptocurrency is gaining quite a word of mouth, with many actively investing in digital currency and various countries regulating its use.
Now, you can use cryptocurrencies to purchase items as well directly. If you choose the right platforms, this includes the ability to buy a car as well! It turns out; certain online platforms accept Bitcoin and other popular cryptocurrencies as a mode of payment.
As the adoption rate of the currency increases, it is very likely that cryptocurrency payments will become mainstream very soon. This is because there are various benefits of cryptocurrency payments. For starters, since it is a decentralized system, it allows you to easily transfer wealth without having to go through the additional costs or hassle of banks.
Within the heart of cryptocurrency is blockchain technology, which is heavily encrypted and hence the transfer of funds remains secure. The transparency offered by the system also ensures that fraud can be easily detected.
But showrooms still matter
Just because trends suggest that consumers would be moving towards online solutions and novel payment modes doenn’t mean that the buying experience we know today would become completely obsolete.
Showrooms have always been an integral part of the car-buying journey, and even when the new normal sets in, its significance will continue. This is because test-driving vehicles are always going to be a motivation for in-store visits, even if those visits don’t lead to conversion then and there.
A survey conducted by KPMG revealed that 83 percent of car buyers would not purchase or even lease vehicles without taking them for a test drive. Since such an experience cannot be replicated on online platforms, it is safe to assume that people will still visit showrooms during the research phase.
After all, it is logistically impossible for online car purchasing platforms to offer test drives for a variety of models! The most they do is also for inspection upon the chosen car’s arrival at the customers’ home.
Paperwork will be conducted online
Even customers that prefer purchasing vehicles from car dealerships and showrooms are likely to prefer online documentation to physical paperwork. This step is the least fun part of purchasing a car. And in today’s fast-paced world, various online tools are available for retailers to fast-track the documentation process.
An Automotive News survey highlighted that 88 percent of retailers surveyed have begun moving the documentation process online. COVID-19 has surely accelerated this process since it discourages in-person meetings.
With the rise of paperless transactions and documentations, the new normal of car buying is likely to entail less in-store time than ever before. This will be true even if consumers purchase from physical dealerships.
If someone had told you a decade ago that we would one day be purchasing vehicles online, avoid haggling salesperson, and use money other than fiat currency, you would have laughed incredulously! This is how much the world has changed in the last decade.
As we move onto the next new normal for buying cars, gauge if you are ready to embrace the modern car purchasing journey. Put your seatbelts on, and begin the ride! It is likely to get wilder with every passing year.