How Technology is Changing in the Car Buying Business

The first car dealership was established by William E. Metzger in 1898.  While dealerships have been around for more than 100 years, the way people sell cars has only begun to radically change in the past few decades.  New technologies have made it necessary for dealerships to adapt if they want to thrive.

How Technology is Changing the Car Buying Business

Not so long ago, the car-buying experience consisted of a prospective buyer visiting multiple dealerships, test-driving several models of vehicles, and making a decision on the car he or she ultimately wanted to purchase. While some of these aspects still remain a constant in today’s car-buying process, technology is changing the game in several ways. Auto dealers are still very much a part of the mix, but their role in the transaction is shifting significantly. Here’s what to know about how technology is changing the car buying business for consumers and auto dealers alike.

Online Browsing – and Buying

Drawing buyers to the lot has always been a substantial hurdle to overcome as for auto dealers – perhaps now more than ever.  Before the digital age, dealerships had to take calculated efforts to entice buyers to visit and purchase from their specific business instead of a competitor. This often meant print advertisements touting best-in-class customer service, the most up-to-date models of new vehicles, and a vast inventory from which buyers could select their next ride.

Now, auto dealers are faced with the reality of the Internet, where buyers do the majority of their shopping online. A good sales team and a top-notch customer service experience do little when buyers are coming in the doors.

In addition to a reduction in the dealership visit prior to purchase, car-buyers have the option to complete their entire transaction online. From browsing available vehicles to reviewing pricing and negotiations, customers can, with the click of a few buttons, have a vehicle selected, financing approved, and the final product delivered to their door without leaving the comfort of their home. Currently, online dealers offering this type of car-buying experience are only able to do so for used vehicles, but the potential for the same in the new vehicle market is high in upcoming years.

Incentives for Buyers

In addition to a different car-buying process, auto dealers are facing more competition in the market overall. This means new incentives must be offered to prospective customers in order to win their business. Instead of swinging signs on the side of the road to gain visibility, some dealerships are offering a fully immersive experience online to entice buyers to come to the lot.

Social media ads, a user-friendly website, interactive calculators for auto financing, and other technology-infused tools are now the norm for dealerships. To keep up with the influx of solely online auto dealers, those who have been around for some time have to innovate to stay relevant and profitable.

Streamlining the Process

Auto dealers already put time and energy into meeting dealer licensing requirements, training, and operating in-line with regulatory guidance in order to do business.  But, in this day and age, dealers must be willing to go that extra mile.

That means shifting traditional models of sales and service to encompass technological tools and resources that customers want. For instance, working to optimize a website, including the ability of mobile functionality, and creating systems for financing pre-approval are key to bringing in new customers on a consistent basis. Auto dealers may also work with a technology partner to implement inventory updates in real-time, or use the power of data integration to speed up and simplify buyer identification verification and financing requirements.

Auto dealers are not on the chopping block just yet, as buyers still want to option to test-drive vehicles, speak with an industry expert on features, and feel a human connection in the process. However, the combination of the tactics mentioned above will keep auto dealers from becoming obsolete as technology continues to transform the industry.


Eric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.

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