Technology’s New Place in the Car Buying Business

Since their entrance into the consumer market, cars, trucks, and vans have been a staple for the majority of individuals and families, and the process of purchasing a vehicle has remained relatively stagnant. The introduction of the Internet, however, has slowly changed the game for car-buyers and the dealerships that provide this valuable service. Auto dealers who are licensed through the state where they operate are facing more pressures due to this digital transformation than ever before, creating a need to adjust quickly. There are several ways technology is shifting the traditional view of car-buying of which auto dealers need to be aware. 

Moving Business Online

The most prevalent change in the car-buying process has been its move away from traditional dealerships to a mostly online model. Consumers are now utilizing online searches to find vehicles that fit their needs in terms of price and functionality, comparing brick-and-mortar dealerships, and reading reviews by other customers who interact with a specific dealer. Instead of taking the conventional route of visiting a dealership to do this research and follow up with a test drive, consumers want on-demand services that leave most physical dealers out of the loop. That means that a strong sales team, solid marketing campaigns, and an expert finance department do little to attract buyers in today’s digital environment.

For some car-buyers, the online process has taken on new meaning in the last few years. Not only are they starting their search for a vehicle online, but they are also completing all aspects of the purchase from the comfort of their home. Some digital auto dealers provide delivery of the vehicle directly to the customer’s door, without any interaction with a physical salesperson on the lot. From financing to warranty selections, customers are embracing a fully digital experience now more than ever before. 

Increased Competition

Moving the car-buying process fully online has left some auto dealers with fewer customers and ultimately, fewer sales, but another pressing issue comes with this technology influx. A growing number of auto dealers are popping up across the internet, with similar inventory as physical dealerships but without requiring buyers to visit a real location. The addition of digital services and platforms to make the car-buying process easier for buyers is increasing competition across the industry. This means that auto dealers not willing or able to make adjustments to their business models may find it difficult to stay profitable. 

New Processes for Business Operations

Although it may seem like the additional of technology in the car-buying process means trouble for current dealers, the reality is that many can sustain business by embracing digital tools. There are several technology-backed software solutions specifically designed to help auto dealers run operations smoothly, including inventory management, accounting for the business, and training for finance departments and salespeople. Additionally, technology resources are available for assisting in the marketing department, focused on building and maintaining an online brand even when the sales process remains firmly on the lot. The addition of these tools in business can make all the difference among auto dealers concerned about increased competition and less foot traffic.

Technology is a firm component of the business environment today, and there will be no looking back to the days of in-person transactions for car-buying. While some consumers still appreciate the experience of traditional dealerships, any auto dealer planning to remain in business must recognize and adjust to the trends in technology influencing the industry at large.


Eric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.

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