Despite the Naysayers, Dealerships Are Here to Stay

Auto retail insiders say shoppers value dealers, even if they begin their purchases online.

Alysha Webb, Contributor

March 11, 2024

3 Min Read
Dealerships
Auto retail insiders say shoppers value dealers, even if they begin their purchases online.Getty Images

LAS VEGAS – Thousands of dealers descended on Las Vegas last month for the annual National Automobile Dealers Assoc. Show. The attendees certainly didn’t believe the dealership was dead. And indeed, despite its demise being predicted for a few years, the dealership is alive and well.

But the dealership experience is evolving along with customer needs and demands, say dealers and companies serving those dealerships.

“We have the technology to help them find products, but we still see that the vast majority of customers want to move from online to offline. The last mile is owned by the dealership,” Doug Miller, president and chief commercial officer of Cars Commerce, tells WardsAuto.

Even younger shoppers used to completing many tasks online prefer to visit a dealership, according to the Cars Commerce 2024 Automotive Trends survey. It found 80% of Gen Z – those born between 1997 and 2012 –  prefer to finish the car purchasing process at a dealership.

The survey of 4,000 consumers was conducted between Aug. 30 and Sept. 7, 2023.

The idea that car buying would move completely online was further punctured by the recent failure of online used car marketplaces Vroom and Shift after they failed to obtain additional funding.

And while car salespeople tend to get bad raps, the 2023 Cox Automotive Car Buyer Journey study found that 93% of consumers purchased new vehicles inside showrooms and 79%  where “highly satisfied.”

Cox Automotive surveyed nearly 3,000 consumers who bought a new or used vehicle in a 12-month period ending in August 2023. It was conducted in August and September 2023.

Evolution is the Key

While the dealership is not on its last breath, it is evolving to meet changing consumer needs. Vendors to dealerships are evolving, as well.

One reason consumers in the Cox study were happier is that they spent less time in the dealership. Only 7%  completed 100% of the purchase steps online; 43%  used a mix of online and at-the-dealership steps.

This online-offline omnichannel approach was the preferred method of car buying of 71%  of consumers in the Cox study.

But while consumers may want to do some portion of the purchase process at the dealership, several surveys show they don’t want to spend that time sitting in offices, especially  F&I offices.

Assurant, a provider of F&I products and staff training, now teaches F&I professionals how to recognize where a customer is in terms of the sales process, such as how much work they have done online, to accelerate the process, Pete Morawiec, Assurant Dealer Services regional sales manager, tells WardsAuto.

“Time is the new currency,” he says.

Some dealerships offer remote delivery of F&I products on the sales floor using tablet computers, says Kellin Koenig, Assurant Dealer Services regional development manager.

“That takes away the apprehension of being shut in an office,” he says.

Having a single salesperson handle the entire dealership sales process, including F&I, is also growing in popularity. Assurant is working with a 22-store automotive group to implement such an approach, Koenig says.

“Customer satisfaction increases,” he says.

At Rick Case Automotive Group, which has 13 rooftops and 18 franchises in Florida and Georgia, one of the first questions in a meet-and-greet with a customer in a dealership is where he or she left off in their online process, says Tim Hlavenka, the group’s national sales director.

Rick Case advertises The Rick Case Auto 90, which guarantees customers  cancomplete car purchases in 90 minutes if that customer has taken certain steps online. If it takes longer, the group makes the first month’s payment.

“All of retail has to evolve,” Hlavenka says. “The dealership will never die.”

 

 

 

 

 

 

 

 

About the Author(s)

Alysha Webb

Contributor

Based in Los Angeles, Alysha Webb has written about myriad aspects of the automotive industry for more than than two decades, including automotive retail, manufacturing, suppliers, and electric vehicles. She began her automotive journalism career in China and wrote reports for Wards Intelligence on China's electric vehicle future and China's autonomous vehicle future. 

Subscribe to a WardsAuto newsletter today!
Get the latest automotive news delivered daily or weekly. With 5 newsletters to choose from, each curated by our Editors, you can decide what matters to you most.

You May Also Like