The pandemic has taught us many things and changed habits forever, with our desire for online shopping – whether it’s the weekly shop, take-aways or retail therapy – being an irreversible trend.
This desire for convenience is also shaping the way we approach buying big-ticket items, such as cars. Recent research by car comparison website, Moneyshake, shows that 82% of consumers would now be happy for their new car journey to be completely online.
So, even the very traditional automotive sales market is adapting to digital commerce. This is evidenced with a rapid growth in online car marketplaces such as Cazoo and Carwow, car finance comparison websites and virtual franchised dealerships, which has made it possible to order a new car in just a few clicks, often with free delivery included.
And COVID-19 has only accelerated the trend so that it is fast becoming the new normal for sourcing your next car. Data from GForces supports this with the number of cars sold online in 2020 using its technology rose 1228%, increasing from just 2,199 in 2019 to 29,209 last year, worth over £500 million overall.
But for all the convenience and perceived value for money, this way of ‘virtual’ trading may have for both consumer and car dealership operators, we mustn’t lose sight of our duty when it comes to responsible lending. It’s all too easy to spend online. That lack of face to face interaction means impulse and desire can win over-caution and affordability.
In fact, it’s almost the perfect storm! With the temporary suspension on repossessions being lifted earlier this year and the end of furlough on the horizon, it should come as no surprise if we see people starting to fall behind on credit payments for vehicles, of which around eight in ten are bought using finance.
Like many sectors, the car market has been hit hard by the pandemic. It might have been late coming to the party in terms of e-commerce but driven by COVID-19 there’s no U-turn. How the car market now responds by ensuring the highest levels of responsible retailing are adhered to, over chasing sales for sales sake, is going to be one to watch.