Broader shifts in the market and other industries signal even bigger changes to the car buying experience
Change in the automotive industry is a strange thing to witness.
First we hear everyone talking about it: industry media, event speakers, and experts of all kinds speculate about how new technology or consumer trends will disrupt our industry seemingly overnight.
When the dust settles, change rarely happens as quickly as the predictions, or in the way that was envisioned.
But make no mistake, our industry is changing—and for the better. The digital tools that were developed before the pandemic—and tested under fire during the pandemic—are here to stay. And they are just the start of the transformation.
Consider some recent statistics that were presented to auto journalists recently from Google’s Think Auto:
Online vehicle sales increased by 600 per cent over COVID-19 with 6 per cent of Canadian shoppers purchasing a vehicle completely online.
12 per cent of EVs were bought completely online.
We can’t discount these numbers as people choosing this method only because they had no other option. Google also reports that “54 per cent of Canadian car buyers indicated that they would consider buying their next vehicle online, and 62 per cent of the Electric Vehicle buyers indicated the same willingness.”
Although this particular shift in buying behaviour shouldn’t be that surprising, given our adoption of online shopping for so many other products, there’s still a stubbornly held belief that the automobile purchase will resist this trend because of our need to touch and feel the vehicles.
Stubborn beliefs, though, aren’t always supported by the data. Google’s most recent findings show that 74 per cent of Canadians are now comfortable comparing offers online, 71 per cent are comfortable comparing models online, and a (slim) majority 51 per cent say they are comfortable to walk around and check out feature highlights online.
Something that also arrives with an increased digital experience is increased transparency. Gone are the days when dealers could post pics of their inventory and the only way to get a price was to visit the dealership. Consumers greeted by that experience voted with their clicks and just moved on to get the information they wanted somewhere else.
The rapidly growing comfort with a digital new or used vehicle purchase is also shifting into other areas like the business office, where full transparency is still often lacking.
The next generation of technology is more consumer friendly and transparent, and some companies are using tools like artificial intelligence and machine learning to help customers determine what they want, and provide them the knowledge they need to make an informed decision.
54 per cent of Canadian car buyers indicated that they would consider buying their next vehicle online, and 62 per cent of the Electric Vehicle buyers indicated the same willingness.
The emerging tools in the business offices will put the consumer in charge, and will be able to provide them recommendations for F&I purchases based on their actual needs, and not based on the highest margin products the dealer wants to promote, or the ones that typically sell the most and are easiest to close.
By providing information about their vehicle driving habits, their financial and lifestyle situation and their perceived risks, these next generation platforms will be able to provide consumers with an educated suite of recommendations based on their real situation.
This isn’t to suggest some F&I managers don’t already do something similar, many of them are expert at listening to their customers and tailoring an F&I offering to suit their specific circumstances and financial position.
But consumers are increasingly wanting to do their own homework and make better decisions instead of relying on someone whose motives they don’t entirely trust.
Consumers now have a better understanding of the true prices of vehicles and are able to determine fair value pretty quickly.
When the playing field is leveled in the business office, and consumers fully understand the F&I products they are purchasing, and can weigh the pros and cons and costs, we will be able to provide them an F&I experience they won’t dread—and might even enjoy.
The dealership teams will still have a role with customers to help answer any additional questions, but they will be talking to consumers that are well informed and armed with their own research. This experience will be better for consumers and for dealership staff who will no longer be expected to push products they know consumers don’t want or need—and that’s a win-win for everyone.