Why Haven’t Online Tools Made New Car Buying Faster?

By Jessica Carstens, - In Money

Picture of a woman signing the papers for new new car in a very nice Bentley dealership

Photo Credit: stockphotosecrets

Despite the rise in online car shopping websites, the process of buying a new car remains frustrating and time-consuming. The average US customer continues to spend an average 14 hours of online research and another three to five hours at the dealership. Between test drives, multiple rounds of negotiation, the trade-in process and finalizing the deal with the Finance Manager, buying a new car can easily eat up an entire day or even weekend!

The main problem with researching a new car online is that each individual will use a car in their own way. A single professional in Laguna Beach needs different features in his car than a family of five in Walnut Creek.

An online car reviewer may not consider how suitcases will pack into the vehicle for a road trip or how easy it will be to install a bike rack. One critic may pan the same vehicle that another raves about; making it difficult for the consumer to know which opinion to trust. There is simultaneously too much information available and yet not the right information to make a decision.

Online research helps many consumers lower the number of vehicles that they want to drive in person, but it takes time to drive to multiple dealerships and go for test-drives. Additionally, because commissioned sales people are often under pressure to turn every walk-in client into a sale, they will often try to draw out the process in the hope that clients will “buy today.”

Car buyers often need to fill out a credit application by hand, wait while their credit report is evaluated and then negotiate the terms and details of paying for the vehicle. There can be a long wait to meet with a Finance Manager on busy weekends when multiple car buyers need to finalize their deals. Financing or leasing requires extra time and negotiation with the finance office. The Finance Manager is also responsible for selling (high-margin) add-ons such as aftermarket options and extended warranties.

Online sites like TrueCar and Costco can save car buyers from negotiating for the price of the car itself by sending them to a dealer where they have arranged a pre-set price, but they don’t significantly reduce the time investment. The consumer still needs to visit a dealership to pick out the car, arrange for leasing or financing, discuss aftermarket options, negotiate the trade-in (if they have one) and sign a lot of paperwork.

Additionally, while the price of the vehicle is pre-set, this doesn’t necessarily mean that the overall deal is a good one for the buyer. Lease or financing terms still need to be negotiated along with trade-in valuation and the price of any desired aftermarket options.

Why not just bypass the dealership? It’s not actually that easy. The system is set up so that only a franchised, licensed dealership can legally sell a new car. TrueCar and similar car-buying sites simply sell the car buyer’s information to a nearby car dealership who makes the final sale.

So why does buying a car at a dealership still take so long? Most of it is just the way the system is set up—there are a lot of steps that need to take place and on busy days the process can bottleneck in places like Finance where there are a limited number of employees.

The internet just can’t fix a number of the time-intensive parts of the process. Until alternative solutions become more widely available, car buyers should expect to spend a considerable amount of time and energy buying their new car.


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