Is online car buying the new wave? Canadians have cars delivered to their doorstep

Shannon Jackson had previously bought books and shoes online.

But never a $ 16,000 purchase before.

That is until May, when she had a white 2020 Hyundai Elantra delivered right to her door through an online car retailer called Clutch.

“I didn’t mean to do this at first,” Jackson said.

“There are some things that I liked. The fact that they showed these close-ups of all the imperfections reassured me that they weren’t hiding anything, ”Jackson said.

Jackson’s 2020 Hyundai Elantra was his fifth used car.

Courtesy of: Shannon Jackson

Jackson did hours of research on the vehicle. She said she found all the information she needed on the Clutch website – CARFAX and the inspection report, owner history and financing options. The car was also competitively priced, about $ 2,000 less than what it saw at dealerships.

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But she was still skeptical of coughing up thousands of dollars in minutes online, to the point that she went to a dealership that had the same car and tested it.

“We started the process of initiating the purchase and I got very nervous…. I spend $ 20,000 to go around a block.

Then she thought about Clutch’s “clean test” over 10 days and 750 kilometers.

“We call it a clean test, not a road test,” Clutch CEO Dan Park told Global News.

“You can kind of go about your business – putting the car in the garage to make sure it fits, shopping for groceries, putting your kids inside to make sure it’s the right car for you. . If for some reason it doesn’t, you can return that car. We will pick it up and return every penny to the consumer.

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Clutch has been around since 2017, calling itself the leading online auto retailer in Canada. The company operates in Ontario, British Columbia and Nova Scotia and has about 1,000 cars in stock, according to its CEO.

Park says the auto industry is working to break into the world of e-commerce long before COVID-19, albeit very slowly.

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But the pandemic forced dealers and customers to support the idea – and quickly. More and more Canadians are driving and buying cars from start to finish online.

“We saw new demand created by people who no longer felt safe using public transit or carpooling services,” said Oumar Dicko, chief economist at the Canadian Automobile Dealers Association ( CADA).

“We have seen a rapid and massive change…. Within weeks, dealers were able to reset all business operations to be able to offer online sales to customers.

Despite an initial sharp decline in sales last year, Dicko says the sudden demand has spurred car purchases to increase, even online. This has exceeded supply and created a shortage, especially for used cars. That, combined with a shortage of semiconductor chips, has caused vehicle prices to skyrocket.

But the demand for vehicles during COVID-19 has also rendered a service that was once considered a luxury now available to the masses: test drives right at your doorstep.

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“I think customers don’t miss out on buying the vehicle online,” Dicko said.

While the exact number of online sales is still unclear, Dicko says it appears younger, more tech-savvy used car shoppers have embraced the idea of ​​buying a car online quite quickly. .

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But that doesn’t necessarily mean in-person dealerships are becoming obsolete.

“We know people still love to see, smell and test drive cars,” said John Carmichael, CEO and Registrar of the Ontario Motor Vehicle Industry Council (OMVIC).

“Buying a car today is the second biggest purchase you make in your life outside of your home…. I hear more and more people who buy online still like to go to the dealership, ”Carmichael said.

Dicko says this rings true in studies.

According to a CARFAX Canada survey of 2,000 people, only eight percent of Canadian buyers of new or used vehicles want to buy their next vehicle online and have it show up at their doorstep. The remaining 92 percent would still prefer to buy a vehicle from the dealership.

This makes Carmichael and Dicko believe that the industry will take shape in a hybrid form: browse online, buy in person.

Nonetheless, the fully online retail experience seems to be working for some.

“There are companies today that sell a huge amount of vehicles without a consumer ever sitting in the driver’s seat to see if the car is right for them,” Carmichael said.

It’s not a good idea if you’re dealing with an unregulated private seller on a marketplace site, says Shawn Vording of CARFAX Canada.

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“I would say the majority of owner-sell vehicles in these markets are from legitimate people selling legitimate cars. Having said that… there are inherently more risks.

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In 2020, the Better Business Bureau received 260 reports of online auto scams, with losses totaling $ 650,000.

“Best practices always apply: ask for a Carfax history report, test drive the vehicle, have it inspected by an independent third party and, of course, unlike a dealer, which is regulated, never send money. before actually buying the car or seeing the car, ”Vording said.

And if you sell your car, never accept a check because it can bounce back.

If a seller is legitimate, Vording says they should be willing to meet in person, show you the vehicle, and talk about its history. And if the deal sounds too good to be true, it probably is.

As for Jackson, as long as she does her research and covers all of her bases, she says she’s officially a convert to buying cars online.

“I will never buy a car any other way, having done it this way,” she said.

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And that business model is here to stay, auto experts say, even long after the COVID-19 pandemic is over.

Click to play the video: Are the days of car dealerships numbered?

Are the days of car dealerships numbered?

Are the days of car dealerships numbered? – June 13, 2017

© 2021 Global News, a division of Corus Entertainment Inc.

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