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Online Car Purchase – Computer Says “Yes”

Towards the end of 2016, SEAT sold a limited number of ‘Mii By Mango’ cars on Amazon in France. Buyers paid €500 deposit and were then contacted by a SEAT advisor to finalise the purchase. Whilst this was a first step towards fully online sales channels it still had a high level of dealership involvement. Research we did at the time showed that an overwhelming majority of potential car buyers had an appetite for more online functionality – but not for a 100% online experience. There remained a strong feeling among a lot of buyers that you can only strike the best deal in direct negotiations with a person, not a computer. After all, is the computer going to throw in free floor mats or an upgraded CD player? Another Amazon collaboration (with Fiat Chrysler Automobiles) worked on the same basis with the purchase being completed and vehicle picked up at the dealership. Other manufacturers followed suit with trials but it wasn’t until Peugeot launched its Order Online by Peugeot platform early in 2017 that things really changed. Peugeot became the first manufacturer to allow people to buy its cars in one place and in one sitting – and in a mere 30 minutes. It also has an electronic signature capability – ie everything, including the finance element, can be agreed and signed via the platform. However, it only offered one type of finance – PCP.

Two years on and a second such platform has been launched, by Volvo UK. It offers all the same functionality but also a free choice of how to fund the purchase – HP, PCP, PCH or cash. Importantly, it’s been developed in support of the retail network and buyers purchase from a franchised dealer (who they select at the start of the process). This recognises the need to retain a physical dealership not only for those that don’t wish to purchase (fully) online but it’s also reassuring to ‘have somewhere to go’ in case of problems. Furthermore, it retains a relationship between manufacturer/dealer and the customers after the sales process has been finalised.

In fact, Volvo UK have collaborated closely with dealerships in the development, thus ensuring there is buy-in from this important channel. One feature that has come out of this collaboration is a part-exchange function that guarantees the value. If a customer chooses a car that isn’t in stock (but rather comes from the factory and has a longer lead time) the system will automatically adjust the value in line with depreciation. One crucial element, the online test-drive booking system, is not up and running yet – but a frictionless and complete online purchase experience has come another step closer.

Two years ago, I wrote a blog on this same issue. At the time I felt that it was too early for most consumers to consider a fully online purchase journey. And that included myself, although I also said at the time I hoped I would get around to the idea because negotiating a new car in a dealership put me off as well. The Fiord Fiesta I own is still going but will celebrate the big 2-0 soon so time is of the essence. Portals like Volvo UK would seem to work for ‘half in-half out’ consumers like me, who dislike the idea of having to negotiate in a dealership but are equally hesitant about a fully online journey without having a dealership to get in touch with if they need to. And now that it offers a range of finance options – it will be more attractive to a larger proportion of car buyers. I still think it’ll be a long time before we all buy cars fully online but the Volvo UK portal is definitely another step in that direction.

Olivier Boelman