Dealers are combating supply chain issues, economic uncertainty, and consumers’ concerns about in person shopping.  So what are car dealers, a historically face-to-face industry, supposed to do?  As Dashboard Insights shared earlier this year, Innovation was likely to be the key to success or at least survival.

Car and Driver described the changes to car buying during the pandemic as “The Enlightenment.”  These changes include online negotiations and even solo test drives.  A recent Forbes article also laid out several key innovations by car dealers since March.  These include upgraded online search capabilities, using personal data to customize experiences, chatbots, virtual test drives, and online transactions. And according to Cars.com, one in five recent car buyers used home delivery of their vehicles. 

So what are some of the most striking changes and innovations? First, much of the process is able to be “contactless.”  And has been clear for some time, buyers prefer online shopping for many purchases—even big ones. Dealers are displaying their inventory online, providing opportunities for online negotiation, and some are even permitting solo test drives.  Second, some dealers are offering home delivery for vehicles. Buyers are able to have the car dropped off at their house, rather than go to the dealership to pick it up and sign the final paperwork.  Finally, as car purchasing shifts to more of an online exercise, dealers are starting to leverage data to customize and target consumers in a way that has been more common in other industries. 

Dealers have also adapted to leveraging used car sales during the pandemic.  The NY Times described used cars as “the industry’s hottest commodity.” According to the article, June alone saw 22% higher used car sales than 2019 and the highest monthly sales total since 2007. Used car sales have been particularly hot because, as we described last week, new car inventory is historically low.  Dealers are leveraging Facebook Marketplace and other online tools to find used cars and to re-sell those cars.  These tools are helpful when consumers are no longer showing up to the dealerships with their vehicles. 

As dealers adapt to these new times, some question whether things will go back to “normal” post-pandemic.  However, all signs point to permanent changes in consumer behavior that are likely to continue into the future.  Fortunately, dealers are quickly adapting to this new normal.