How do you sell cars when showrooms are shuttered and customers are locked away in their homes? Online, of course. That’s what’s happening all across America as car dealers race to create online portals, figure out how to being cars to customers for test drives, and struggle to find ways to get legally binding signatures from people without direct human to human contact.
Many states have imposed restrictions on retail outlets like automobile showrooms such as the one by Michigan Governor Gretchen Whitmer which permits some dealership activities but not others. “Workers at motor vehicle dealerships who are necessary to facilitate remote and electronic sales or leases, or to deliver motor vehicles to customers, provided that showrooms remain closed to in-person traffic,” her executive order states.
Rhett Ricart, head of the Ricart Automotive Group in Columbus, Ohio, tells the Detroit Free Press, “This is going to fundamentally change how people view buying a car. By the end of this year, you’re going to see 80% – 90% of U.S. new car dealers with full e-commerce capability in their shops.”
Everything will be handled online including arranging for test drives, he says. Final signatures have to be “wet” — meaning they take place in person using a pen — in order to be legally binding today, but virtual signatures are becoming common in many daily transactions. There are moves afoot to make them legal for formal documents like sales contracts as well.
It’s easy to consider Rhett Ricart’s words as just one man’s opinion except for this. He is the current chairman of the National Auto Dealers Association, a group which has been vigorously opposing online sales for the past decade. The times they are a’changing, indeed.
Doug North is another auto dealer who agrees with Ricart. “We’re seeing a fundamental change in the way cars will be sold. This pandemic is going to create some permanent changes.” Once again, one man’s opinion but consider this. North is chairman of the North American International Auto Show held each year in Detroit. He and Ricart are “influencers,” in the parlance of the online world.
Moving sales out of the showroom and online could become the new normal. Dealer group owner Ryan LaFontaine tells The Free Press his customers can reserve specific vehicles online for test drives. “There’s a new norm. All dealers are being forced to adapt. We’re refining the process now to sign and finalize the deal off-site. People are changing their buying habits. Online platforms are as important as brick and mortar.”
EVAnnex reports online tools for car dealers are already being rolled out. It says Autotrader has launched a set of online tools called Dealer Home Services, which helps dealerships set up “no contact interactions” and schedule test drives, pickups, and deliveries.
A recent survey by Cox Automotive finds most customers really dislike the time it takes to shop for a car — often up to 3 hours or more. Autotrader analyst Michelle Krebs says consumers are often frustrated by the wasted time wasted shopping for a car. “This is where we’re headed,” Rhett Ricart says. “Customers have always wanted quicker interactions, and now, the change is accelerating exponentially.”
The takeaway, of course, is that Tesla has been selling its cars this way for nearly a decade, despite fierce opposition from auto dealers. Perhaps as part of the lessons learned during this pandemic, attitudes about online sales will begin to change in the industry. Once people experience the freedom that comes with online car shopping, it is highly unlikely they will want to revert to the old ways of doing business.