Digital car buying on the rise, but in-store remains preferred option — Study

Car buyers are showing more interest in digital retail but overwhelmingly choose to work with dealers, according to new research from OC&C Strategy Consultants.

Driving the news: E-commerce has become an increasingly popular alternative to the in-store car purchase experience. However, the growth of digital retail in the auto industry has slowed significantly since the pandemic, with most buyers continuing to shop at their dealerships.

• Interest in buying vehicles online picked up during the COVID-19 pandemic but has now hit a plateau. The number of consumers who say they’d be willing to purchase completely digitally still sits at just 36% in the U.S., after rising 5% between 2022 and 2024.

• There is a massive gap between those who consider purchasing online and those who actually do. Less than 5% of consumers across the globe are buying cars completely online.

• Shoppers also prefer to use dealers over other non-traditional sellers, despite the entrance of major competitors into the auto sector. Only 11% of car buyers said they would be interested in buying from a digital platform like Amazon, which recently launched a retail partnership with Hyundai.

Zooming in: While customers appear to prioritize trust with respected dealers over the convenience provided by digital retailers, there is still plenty of room for e-commerce to play a bigger role in the car market.

• OC&C notes that certain demographics, such as younger consumers and electric vehicle buyers, are more likely to appreciate online shopping than others. For instance, 61% of buyers aged 35-44 say they would be interested in purchasing digitally, much higher than the average. Dealers looking to build up their e-commerce business can target these groups to drive results faster.

• Two big reasons car buyers opt to purchase in-store are the belief that online pricing and stock are less reliable and a lack of knowledge that digital retail is an option. The right tools and marketing strategies could solve these misunderstandings and lead to more online transactions.

Bottom line: Consumers continue to prefer the in-store dealership experience over other car buying options, but that might not always be the case. Retailers who offer a strong omnichannel approach, one that puts equal emphasis on digital and traditional purchasing, will be best prepared for the future of the auto business.

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