8:17 am, June 21, 2024
Younger buyers are favouring the online route for used car purchases despite the failure of Cazoo.
That’s according to research by motor retail technology outfit iVendi.
It asked 1,000 car buyers how they felt about online purchasing, and of those aged 30 or under, just over a fifth (21%) said they planned to buy their next car at a dealership, as opposed to 23% of those aged 31 to 44 and 35% of those aged 45 and over.
Ivendi says that shows that the future of the used car market is increasingly heading towards online, in spite of the recent collapse of Cazoo.
Cazoo went into administration in May after announcing in March that it was giving up online sales and becoming an online advertising marketplace for used cars instead.
The research by iVendi comes from its latest white paper – Driving Future Success: Five Key Trends in Online Retail – which it presented at our Car Dealer Live conference the day after Cazoo announced its transition.
Click and collect was the most popular form of car-buying chosen, the research found, favoured by just over half (51%) of respondents under 30, 47% of 31-to-44-year-olds, and 37% of 45s and over.
Meanwhile, preferences for fully digital purchases with home delivery without any interaction at all with a physical dealership were consistent across all age groups at 27% or 28%.
Darren Sinclair, chief commercial officer at iVendi, said: ‘For us, there are two key takeaways from these findings. The first is that there is a clear preference for online over showroom purchases coming down the tracks fairly quickly.
‘The second is the degree to which online car buying is already the norm in the minds of our respondents.
‘Even if you look at people aged 45 and over – the most potentially conservative set of buyers in our sample – more than a quarter plan to purchase their next car online with no physical interaction with the dealership. That is significant.’
He added: ‘It’s important to take away the right lessons from Cazoo. Perhaps the obvious one is that the market is not yet ready for online-only sales, but to us, that is a misreading.
‘We know from this research, our dealer customer base and the market in general that the appetite for digital is increasing and that trend is likely to continue.
‘What the Cazoo experience instead shows is that it is not always easy to meet that need.
‘Too many online customer journeys that we see are aimed at theoretical, friction-free consumers rather than real-world car buyers who often have tricky needs that they want met digitally.
‘Negative equity is one of these and part-exchanges is another.
‘Our research shows that 56% of people who had a part-exchange were unable to carry out that process online, and more than a quarter of those abandoned their purchase because of that fact.
‘However, there are solutions to these potential roadblocks, and we are working with many dealers who want to offer an online buying experience that allows all consumers to complete their purchase online, however complex their needs.
‘To us, this is very much the fundamental direction of motor retail in the medium term.’
The white paper can be downloaded free here.
