SHOPSMART AUTOS – CUSTOMER INFORMATION – NOVEMBER 29, 2020 – 2
The online experience also removes the “high-pressure situations” at dealers which many consumers prefer to avoid. “You control the flow online,” Drury said. That control advantage includes being able to break apart portions of the car buying and selling process, like trading in a current vehicle and adding it to the used car market. “You can do it online now and don’t have to trade in to a dealership. … You can can see what the dealer will offer versus online, so there’s more control over each component,” he said. But the auto consumer expert stressed that online businesses like Carvana and Shift Technologies remain small relative to the total size of the used auto market. Carvana sold a few hundred thousands units in all of 2019, and a little over 55,000 in the second quarter of 2020. That is in a used car market that is above 40 million units annually. “They are gaining traction and there is lots of market for them to transact on, but not everyone is doing it,” Drury said. He estimated Carvana and Shift combined sales at less than 1% of the market. He also cautioned consumers about assuming that online companies are always the most competitive on price. The online competition is a good thing for consumer pricing options in general, but in some cases online sellers charge a premium for their service and inventory and shipping across states. That means consumers should always check to make sure the same vehicles are not available at a lower cost in a contactless online experience from a local dealership. One reason prices rise is a limit on inventory, and there is a sector check on how much the used car market can grow even amid high demand. With 45% of new car sales relying on a trade-in as part of the financial equation, the used car market is linked to the overall sales environment for restocking of its inventory. At a time when consumers are buying less cars overall, the vehicles coming into the used inventory from rental agencies and dealer lease-ends are not enough to tilt the supply-demand balance. Prices have recently been rising on used cars, not going down over time, and that is something you rarely see in the market. Pricing has softened a little since the summer, but Moody said shoppers “shouldn’t go looking for deals.” Rather, they should be more focused on getting what they want. “I would shop around. … but don’t be surprised if you end up having to pay more than expected for a specific car you want,” he said. Many local dealers offering online sales do have virtual walkaround technology, test drives available at home, as well as delivery. They also have the advantage of offering access to a service department. “The local dealer is not completely out of the game,” he said. Especially for consumers interested in recent models, between one and four years old, inventory will be stronger at dealers and they can offer you certified pre-owned vehicles, in some cases, at low APR financing as well.Tags: 2019 Subaru Forester Touring, 2020 BMW iX3, 2020 Chevrolet Suburban, 2020 dodge charger, 2020 EQC, 2020 Ford Super Duty, 2020 Honda Pilot, 2020 Kia Optima, 2020 Mercedes Benz, 2020 Nissan Versa, 2020 Subaru WRX STI, Audi SUV, BMW, Brandon K. Hardison, Chevrolet Car, Chevrolet Sonic, Dodge charger, electric vehicles, honda, Honda Pilot, Hyundai SUV, Mercedes Benz, Nissan Rogue, SUV, upcoming car, Volkswagen, Volkswagen Tiguan SEL Premium R-Line, Volvo Car
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