Motor Finance can’t ignore the online retail revolution forever
Last month I investigated a few online retailers which were launched at the end of 2016 and the start of 2017.
Some of the solution and designs they’d come up with really demonstrated that these sites were well planned and thought out.
However the fact remains we’re now in March 2017 and I can go on Amazon right now and order an inflatable unicorn horn for cats, if I wanted to. Between this site and eBay, most things I could possible want are attainable with just a few clicks, often with next day delivery.
But if I want to buy a car, that’s a different story. Some manufacturers offer an online storefront, and some used car dealers offer some online functionality beyond being able to browse stock. But if I wanted to actually buy a car, there is a not insubstantial chance I’d need to find my way to a dealer to actually make the purchase and buy the car.
So the question is why is motor retail behind in this regard?
Part of the problem is that one car might be very different from another one of the same model. In the new space, cars are often made to order these days, and have extensive configuration options. In the used space, a car which has been driven responsibly, and kept relatively clean will likely be in better condition than a car which has been abused for 60,000 miles by a smoker who uses it to ferry around their muddy dogs between walks. How to communicate these differences effectively online is a difficult challenge to surmount.
Then there is the role of the dealer. Cars are complex machines, as are the finance agreements many people buy them with. A dealer can play a large role in explaining everything to a customer, and make sure they understand exactly what they’re getting. Mirroring this online is no easy feat.
We’re now starting to see some dealers come up with solutions to these problems, though. Better web design and speeds mean websites are getting better at portraying a cars condition online – there are now a number of websites which include videos of cars. E-signature is giving the ability to sign documents online, and customers themselves are becoming increasingly willing to make large purchases online.
Speaking to lenders, manufacturers and dealers, I get the sense that we’re on the precipice of a digital revolution in motor retail. If you’re a finance provider or broker, it’s worth making sure your services are ready for such a change. And if you’re a dealer or manufacturer, you need to make sure you don’t get left behind.