Top Industry Secrets in Transitioning Car Dealerships to Selling Cars Online

07/06/2017 03:12 pm | Posted by Admin

Just like losing weight, changing your dealership's internal processes to offer your cars for sale online isn't easy. The hardest step in this transition will be commitment and willingness to accept the unknown and the new technology.

There are many items you need to plan for and consider before executing changes at your dealership. Here are some of the main items you should consider once you are ready to engage with the online consumer:


What online functionality do you want to offer the consumer? Every dealership is different, and you have to operate within your means and within your available resources. While some large dealer groups are moving quickly towards offering full e-commerce functionality, some dealerships are slowly transitioning to selling cars online. There is no right or wrong way to transition that is the same for all dealerships. You need to figure out what works best for you as long as you recognize that time is not your friend. As consumers are moving towards making more and more purchases online, you do not want to get left behind because you took too much time transitioning.

So when considering what functions can be digitized and be moved to an online platform, you need to consider what the main components are to the online transaction. It is also important to consider that the transaction begins at the research stage, not at the time the consumer makes their purchase decision. So if you want to sell cars online, you need to consider how much of the research stage you want to embed into your platform. 

Digitizing the Research Stage

We know that the online consumer spends hours researching their next vehicle purchase online which means that the more relevant the information you offer to the consumer on your website in order to assist them to make a purchase, the longer they will stay within your environment. So what can you do to make a consumer stay on your site longer?

Price comfort

Consumers have access to a lot of information with regard to vehicle pricing. Unfortunately, most of that data and information is not on a dealerships website but on third party websites. Third party websites also allow a consumer to shop pricing across multiple seller’s simultaneously. This gives comfort to the consumer that they are able to find a vehicle at a fair price. When visiting a single dealership’s website, what can you offer to the consumer to feel that they are receiving a fair deal? Alternatives include, a link to a search for the same vehicle on third party websites, or you can post historical prices which your dealership has previously sold vehicles for. There are many ways to give a consumer comfort, but the key will be transparency and access to information.

Loan Payment Information

In North America there are over ten million monthly searches specifically related to online auto loan calculators. As most consumers budgets are payment driven, the popularity of loan calculators are increasing. But the issue is not the ability to provide a consumer access to a loan calculator, it is giving the consumer the ability to use a more accurate loan calculator which shouldn’t allow a consumer to input impossible terms into the online loan calculator. For example, if you have a vehicle with an accident history, providing a loan calculator is misleading if you don’t work with any lenders that offer loans on vehicles with previous accident history. 

Dealership Reviews

Online consumer reviews are becoming increasingly important as a part of the consumers purchase decision. This can include reviews on the dealership, reviews on a specific vehicle, lender or aftermarket service provider. Knowing that consumers use reviews to make a purchase decision, how easily do you allow consumers to access reviews through your website? It is important to note that past client testimonials are slightly different than reviews as testimonials are usually uploaded by the dealership, which means that the dealership can filter the reviews and choose which reviews to display to the consumer. Also, bad reviews are important to show the consumer because it will help the consumer understand how the dealership deals with difficult situations.


Although online reviews are important to the consumer as it will allow consumers to differentiate a dealership’s service levels between one another; it is also important for the dealership to clearly state what makes them so special on their website. This is typically where most dealerships fail as their message is not clear. Stating that a dealerships service is above the average is not really effective since consumers can verify that by reviewing online reviews. So, what do you do as a dealership to put you above others? Some dealerships have return/exchange polices, while others will pay for the transportation to get to the dealership. Either way, what hooks are you offering to the consumer to separate you from your competitors? Generic statements are typically ignores so making guarantees to the consumer which they can rely on goes a long way.

Test drive

Getting the consumer to commit to a test drive is crucial as the chances of a deal closing greatly increases with this commitment. Based on this, you need to make it as easy as possible for the consumer to get to your dealership and try out some vehicles. So how do you make the process of booking a test drive as easy as possible? For example, allowing a consumer to book a test drive online will increase the likelihood of the consumer committing to the test drive compared to the consumer being required to call in or even physically visit the dealership. But once the consumer books the test drive, how do you excel with ensuring the consumers experience will be optimized? The test drive is a very important part of the research stage when it comes to buying a vehicle. It allows the consumer to get comfort with the specific vehicle, but also with the dealership. It is crucial that dealerships make this experience exceptional for the consumer as this will be an important factor in determining their purchase; especially when it is two dealerships competing on the same consumer but have similar inventory. 


Many times, the information on a website is not enough for a consumer to make any commitments as they have more questions and would like to interact with the dealership first. So, if a consumer is on your website and has a question, how easily can they get in touch with the dealership and how quickly do they get a response? It is important to recognize then during the research stage, after a consumer visits your website they will typically continue the research journey and visit other websites as well. But let’s assume that while the consumer is on your website, they have a question. If you simply have a “contact us” form which they fill out, even if they choose to complete the form, most likely they will then leave your website and continue visiting websites of other dealerships. But, if you want to try and capture the consumer, a live chat function would have allowed the consumer to stay within your online environment while they were getting all of their questions answered. 

Digitizing the Payment Processing

Once the consumer completes their research, and is ready to commit to a vehicle, in many cases they would like ensure that the vehicle is held in order to ensure it is not sold while they complete the balance of the transaction. Although this part of the journey seems simple, it is important to consider how convenient you would like to make it for the consumer to make any payments towards the vehicle? Although this can include the initial deposit to hold the vehicle, an online payment processing service can also be used to allow consumers to buy cars in whole completely online. Also, it essentially allows your dealership to operate 24 hours a day, seven days a week as consumers will have the ability to purchase vehicles online and make deposits with through an online payment processing service.

Digitizing the Financing

One of the most time consuming processes, and pain points for the consumer is the financing process. With the majority of Canadian’s having limited savings, financing and leasing plays an important role with the vehicle purchase transaction. Being one of the largest consumer pain points, a dealerships ability to automate this process will have a great effect on their bottom line; not only through a potential increase of revenue (which is attracting consumers that prefer to make purchases online), but also through a reduction of costs. If consumers can control the F&I process using an automated online system, then the requirement of F&I managers is significantly reduced. In order to automate the financing, there are many different elements which can be automated, and in different ways.

The main consideration is how much control do you want to give to the consumer in order to allow them to decide what they feel is best for them?

For example, once a consumer submits their online credit application, is the dealership involved in selecting which lenders to submit the application through and are they also involved in selecting which approval the consumer sees? Or does the consumer have the control of choosing which lender they work with? Of course, consumers want control of every transaction they take part in but the conflict is that dealerships make profit from maintaining the control and guiding the consumer to make a decision based on what is better for the dealership as opposed to the consumer. So a dealerships philosophy will greatly affect their online ecommerce footprint. Dealerships that want to maintain control will potentially have less clients compared to dealerships that are willing to give up control but the dealership that maintains control will potentially have greater profits per transaction compared to the dealerships that give the control to the consumer.

Of course most industries are moving towards the philosophy of giving more control to the consumer as that is what consumers are demanding right now; control and transparency of the transaction. So although this seems like a small decision, strategizing the direction of a dealerships online capabilities will greatly differ if the philosophy is based on the traditional model of maintaining control versus the up and coming philosophy of giving more control to the consumer. 

Digitizing the Sale of Aftermarket products

Aftermarket products can be a difficult sale. And without a sales person pushing those products, you may think that there will be a reduction of your dealerships revenue. On the other hand, test have shown that Aftermarket Sales actually increase when a consumer gets to control the process themselves; effectively, giving them access to the information on all of your products along with the cost, and then allowing the consumer to decide what to add onto the vehicle, without using any sales person, will actually increase your revenue and decrease your costs simultaneously.

With all of the main components outlined, you can now consider how to implement these technologies into your dealership, but before any decisions are made, time should be spent on determining your dealerships philosophy with regard to who will maintain control of the transaction; will you maintain the control or will you be a forward thinking dealership that gives control to the consumer? Only once you have a better direction based on your chosen dealerships philosophy, you can then spend time considering if and how your internal process should change in order to reflect your philosophy? Simply put, if you are a dealership that believes that the industry will not see any changes, regardless of what is seen in other industries, and that dealerships will always maintain control of the transaction, then your focus should be on digitizing your current sales process.

This means that you simply offer the same service in the same way you are offering it now, except doing it online. But, if you are a dealership that believes that the industry is changing and that consumers are demanding more control, then you need to recognize that you may need to change the internal process at the dealership and then digitize the new processes.

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Article by Eric Kaplan - Chief Operating Officer TREND Financial.


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