Online Car Sales, Is Now The Time?
Sunday, May 28th, 2006
With a whopping two-thirds of new car customers researching their purchases online and virtually complete access to the byzantine maze of rebates and incentives, consumers have been using their new-found knowledge to drive down the dealer’s profit margin. This is making some dealers, notably consolidated dealer networks like Lithia and AutoNation, consider how to better integrate online retailing into their operations. As a direct result, AutoNation is launching its SmartChoice online service in June.
Meanwhile, financial institutions like Capital One and Chase (think auto loans) are looking at online auto retail channels as a way to streamline the buying process for their loan clients - using volume buying power to guarantee a fixed price for its customers before they set foot in dealerships. Capital One has partnered with Zag - an internet-based company that brings its car buying expertise to affinity and membership organizations (think credit unions, buyers clubs like Costco, etc.). Even Amazon is rumored to be looking at auto sales.
Is this the death knell for the dealership? Well, no. By law, independent online sellers cannot buy “factory direct” - they must buy their cars from a dealer. Besides, virtual test drives aren’t very much fun.
Online Car Sales, Is Now The Time for You?
Tags: online car sales, car sales
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