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The Evolution of the Car-Buying Process

process of buying a car

Maybe no other business model was in more desperate need of an overhaul than the process of buying a car. People almost universally loathe wandering lots, discussing options and financing, negotiating prices and filling out reams of paperwork. It can be enough to make people want to just ride Ubers permanently (which, as it turns out, is happening).

Fortunately, the modern world has caught up to the industry. There are now a number of new options and enhancements to car buying that make it easier, more efficient and, dare we say, enjoyable?

Buying Online

You can buy just about anything online these days, so why not cars? There are already numerous car-buying sites, including Carvana, Vroom and Shift. The business model for all these companies is generally the same. Each has an inventory of cars that buyers can search through on their website. Most online dealerships use newer-model used cars, although companies like NowCar offer new vehicles.

Once a user finds a car they like, they can purchase it at a fixed price and fill out all the paperwork in just a few minutes – all without leaving the house. You can even get the car delivered right to your driveway. (Although, if you’re using Carvana, you may want to visit them in-person just to be able to say that you purchased your car from a vending machine.)

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Speaking of Carvana, the online dealer is the prime example of the shifting dynamics of the car-buying structure. According to the company, in 2018, Carvana was the fastest-growing automotive retailer in the U.S. by units. It sold 94,108 retail units over the course of the year, which represented a 113% increase in sales. “Carvana is ‘the new way to buy a car,’ giving car buyers a great selection of more than 15,000 vehicles, at a great price, with the great customer experience we’ve become known for,” said Ryan Keeton, chief brand officer and co-founder at Carvana. “More and more consumers are embracing the transparency, ease and convenience we offer.”

Online dealerships not only make the process of buying a car easier and more convenient, they make it much less expensive. By circumventing the brick-and-mortar dealership, companies also avoid all the overhead that comes with it. This savings is then passed down to the buyer.

It’s not just the car-buying that has moved online. Drivers can also pre-approved for a car loan through AAA without leaving their house.

process of buying a car
(Photo: Courtesy of Porsche)

Augmented Reality

As convenient as online shopping is, purchasing a car based solely on two-dimensional images is not the most comfortable idea. This is one of the main reasons the process of buying a car took so long to evolve. Yet many people, particularly younger buyers, still want to avoid a dealership. To solve this problem, car manufacturers are increasingly turning to augmented reality.

Augmented reality is a technology that virtually overlays images and information onto a physical environment. With this technology, consumers can use their smartphones or tablets to place a life-size, three-dimensional image of the prospective vehicle in their driveway.

Not only can buyers walk around it and open the doors, they can get inside. Augmented reality allows drivers to virtually sit inside the car to get a feel of what it would look like in real life. Jaguar Land Rover, for example, created a 360º view of the interior of its new car, the Velar.

process of buying a car
(Photo: Courtesy of Audi)

Digital Showrooms

Even those who do dare venture out of their home and into a dealership can still experience digital technologies. Many now have in-store apps that let customers view and customize their car just as they would from their home computer. But luxury manufacturer Audi has taken it one step further with Audi City. Located in several major metro areas around the world, Audi City is an all-digital showroom. There are no tangible cars in-house. Instead, buyers view the vehicles on giant display screens. Customers can digitally configure any car to their liking and then get a realistic experience of driving it through the use of virtual reality.

The digital nature of this business model allows Audi to present its entire catalog of cars to consumers, including all trims, options and accessories. In total, there are tens of millions of permutations created with just the touch of a button. All-digital showrooms have the added benefit of taking up significantly less space than a traditional dealership. This helps increase consumer access by enabling dealerships to operate in more densely populated areas, such as large cities.

And it is not just manufacturers offering this technology to the public. Third-party companies are getting in on the fun as well. RelayCars, for example, has apps that provide a virtual look at nearly every make and model on the market.

Subscription Ownership

Cars are more expensive to own than ever before. It’s a large initial investment, then monthly payments, plus insurance and gas and maintenance, all for a product that loses value the minute it rolls of the lot. Unless you know that you will be driving that car for the long-haul, the traditional process of buying a car may not be for you.

That’s why companies are now offering drivers a new option – subscription service. Just like you would pay a monthly fee for your Netflix subscription, buyers can  pay a flat rate to drive a pre-owned car for a set period of time. Users simply log on to the app of their choice, such as Flexdrive, Fair and Borrow, pick the vehicle they want and how long they need it for, and then go pick it up. After that, they pay a weekly or monthly fee, which usually includes insurance, unlimited mileage and routine maintenance. When the subscription term is over, the driver simply returns the car. The traditional long-term commitment of car ownership is relinquished.

How do you feel about the process of buying a car? Are you fine with the traditional model or do you think it needs revamping? Let us know in the comments below!

Looking for a new car? Make sure to check out our reviews and Auto Buying Program first and learn about AAA’s financing and insurance rates!


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11 Thoughts on “The Evolution of the Car-Buying Process

  1. This method of purchasing a car is only for the lazy, the insouciant, and the prodigal. Can’t people get up and walk around in the world any more?

  2. One of the most important things I consider when buying a new or slightly used car is the relationship with the dealer. Most cars now have extended warranties and you can buy even more coverage if you wish. I want a dealership that’s going to stand behind their product and be there when I need good service, a loaner, etc.
    You don’t get any of that when you buy a car on line. That alone is a deal breaker for me.

  3. I like the idea if it is less expensive, which it should be by eliminating the dealerships by a considerable amount. But I would definitely go to the dealership first to road test whatever car I would be interested in.

    1. Hi Burton! Agreed, test drive is a must, especially if you are not sold on the model at the time of purchase. If you know what you want, then that would be the way to go. Thanks for commenting! -MM

  4. While the on-line information is great for research, trying a car for “fit” is critical when one driver is taller than 6’0.” It is difficult to find reliable legroom, headroom, and should dimensions. In addition, seat cushion lengths are shorter many Asian cars which makes the seat uncomfortable on loner trips. There is no substitute for trying it on.

  5. I brought my car from Carvana and overall my experience was positive. Price might be higher compared to local dealerships, but the inconvenience and time saving are things that can’t be beat. Plus they offer 7 day money back guarantee and 100 days additional warranty. So if you don’t like it, they will just pick it up free and clear. Now tell me which dealership will offer the same perks. 🙂

  6. I agree with Steve C. 100%. Enough of this online stuff. It’s like buying a suit without trying it on and having it tailored.

  7. Interesting concept indeed. Unfortunately it lacks the “touchy-feely” sensory feelings that only sitting in a new vehicle will give you. Is the fabric or leather a cheap product? Will the seat go high or low enough? How low to the rear seats fold down? Do the doors sound tinny and cheap? How easy is it to open the rear hatch or trunk? Is there enough headroom? These cannot be quantified via an on-line process only. The concept is great once you’ve actually seen and test drove a car you’re interested. This way you can then ass the options you want easier. Nice try guys! back to the drawing board and I’ll go straight to the dealer to see for myself.

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