Will Social Distancing Push More People To Buy Cars Online?

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Elon Musk’s announcement early last year that Tesla was going to close its stores and shift to all online sales was met with mixed reactions with most people being shocked to hear about the change. Tesla later reversed this decision, opting instead to close only a handful of underperforming stores. In an article covering the change by Maximillian Holland, it was easy to see why closing brick and mortar stores in favor of 100% online sale made a lot of sense:

• 78% of all Model 3s were purchased online in 2018.
• 82% of buyers didn’t even take a test drive before buying.
• Strong brand awareness of the Tesla brand makes prospective and mostly tech savvy consumers comfortable with online purchases.
• Online sales unlock efficiencies, reducing vehicle costs by an average 6%.

A lot of people in Africa would not have been shocked at all at the prospect of online-only car purchases. In fact, a lot of people in Africa have been buying cars online for over a decade now. Most countries in Africa don’t have a large vehicle manufacturing or assembly industry. Outside of South Africa and a few other countries, it’s pretty hard to get affordable vehicle financing on new vehicles. Therefore, buying a brand new car for many in Africa is just not possible. People have then turned to buying used cars from counties like Japan, the United Kingdom and the USA. As a result, over 80% of the of cars registered in Africa are used cars.

Buying a used car online is the cheapest and most efficient way to get a good low mileage used car for most people in Africa. It cuts out the middleman, yes that old fashioned used car dealership. In fact, one can even buy a car online using Bitcoin!

Buying a car with bitcoin is an increasingly popular means of purchasing a vehicle in countries without a foreign exchange, such as Zimbabwe. The good news is that there are now a large number of used electric vehicles on these websites. First generation Nissan LEAFs, Mitsubishi i-MIEVs, and if one looks really hard, one can get a Nissan eNV200 electric van.

Gladys Mukwazhi (GM) of Harare recently bought a 2015 Subaru Crosstrek Hybrid online using IBC. We spoke with her about her online car shopping experience.

CT: What made you decide to buy a car online and have you bought a car online before?

GM: I prefer buying online because there is a wide range of vehicles to choose from on the websites and yes, I have bought cars online before.

CT: How was the car buying experience and process?

GM: The whole process was very transparent and convenient. There are online sales agents who will assist you and provide you with all the details of the vehicle you want to choose.

CT: Do your friends and family also buy cars online?

GM: Yes, my friends also buy online but family? Not that I know of at the moment.

CT: How long did the entire process take from choosing the car online in Japan to getting it delivered to Harare?

GM: 7 weeks.

CT: You didn’t have any fears of buying something big like a car without even seeing it or test driving it?

GM: No fears at all especially given the fact that they provide a lot of information on the car and its condition. They also share videos, so you get a virtual sense of the vehicle.

CT: What’s the mileage on the vehicle you bought and its general condition?

GM: Mileage was 78,000 kilometers and it is in good condition.

CT: Did you choose the hybrid vehicle intentionally?

GM: Yes, I wanted something different and more economical.

CT: Will you consider buying a full battery electric vehicle next time?

GM: Most definitely.

The #StayHome campaign, Social Distancing, and the need for people to replenish supplies has resulted in a surge in online shopping and home deliveries since the 2020 coronavirus pandemic. The COVID-19 pandemic has seriously disrupted most people’s normal way of doing business.

As more and more people limit their trips to public places, including store visits, whether voluntarily or on orders from their government, online car purchasing is looking more appealing. If people in Africa are comfortable purchasing an out-of-warranty used car online from thousands of miles away without even seeing it, let alone test driving it, then surely it must be easier for those who can afford it to take the plunge and order a brand new Tesla or other EV that is still under warranty even without the test drive. The online car shopping experience may just be one of the unlikely winners from this unfortunate COVID-19 pandemic the world is currently at war with.