The Internet has become an indispensable component of the car-buying experience. According to the 2017 Cox Automotive Car Buyer Journey, 88 percent of consumers go online nowadays before buying a car. They're going to the manufacturers' websites to research models, compare trim and package options, ask questions and submit sales leads. And they're turning to automotive media like Autoblog to read reviews and other news, and to independent sites like the Insurance Institute for Highway Safety to look up safety ratings.
But in many cases, the Internet is relegated to a supporting role. That's thanks to laws that vary from state to state regarding the ability to buy directly from the manufacturer, and to the limitations of dealership websites, which may be able to handle things like negotiating lease terms and pre-approving credit, but not trade-in value or the final onslaught of paperwork.
It's also down to a more fundamental truth: When considering something as expensive and important as a new car, most customers would agree they want to be able to test-drive their new wheels before agreeing to the purchase.
"There's tons of opportunities to determine which vehicle they want," said Blake Underriner, managing partner of Walla Walla Valley Honda in Eastern Washington. "Obviously we're in an industry where people like to touch and feel before they decide what they want."
Karl Brauer, senior director of content and executive publisher at Autotrader and Kelley Blue Book, said dealerships are adding online capabilities.
"You can get pre-approved ahead of time, you can submit a lead and you can set it up where you can go to the dealership and essentially, all you have to do is sign paperwork," he said.
Some dealers can now handle paperwork over the web and deliver new vehicles to your home. "And it's going to keep going that way," Brauer added. "We will see at some point a fully online process that people can use fairly soon."
Unless you're set on buying a Tesla, you're going to have a hard time escaping a visit to a dealership showroom as the last step in the buying process. Tesla, the upstart manufacturer of high-end battery-electric vehicles, is the best known of a new breed of automakers challenging entrenched state laws that prohibit auto sales direct from manufacturers and instead require consumers to buy from licensed franchise dealers.
"No state prohibits you from buying a car on the Internet in the sense that you can buy a Tesla online, and Tesla will deliver it to your home," said Daniel Crane, a law professor at the University of Michigan who has worked on this issue with Tesla. "No state does — and probably could — prohibit that."
What's different, Crane says, is that some states, like Texas and Michigan, prohibit manufacturers like Tesla from operating their own storefronts or service centers. In Michigan, for example, the closest Tesla showroom is in Columbus, Ohio.
"If you order a car online from Tesla, there's no Tesla store in the state where you can pick it up, no service center where you can have it serviced," Crane said.
That said, e-commerce capabilities are advancing rapidly across the industry. Virtually all auto manufacturers feature online build and price capabilities and the ability to ask for a quote. Dealers are also starting to develop e-commerce capabilities, including the abilities to evaluate trade-in value, find interest rates and get credit approvals.
Underriner works with a National Automobiles Dealers Association subgroup that is tackling e-retailing strategies and best practices. He says the industry is working to cater to changing consumer expectations.
"Whatever way the customer wants to buy is the way we want to take care of the guests," he said.
Underriner recommends that consumers start their process by asking themselves what features are most important to them. Are you looking for the latest in connected, hands-free technology? Strong safety ratings? Something to haul a family and lots of gear? Fuel economy? And what's your price range?
An easy place to start is with Autoblog's new Car Finder tool, which lets you filter vehicles based on your budget and some of the other factors noted in the previous paragraph and compare specifications and prices. Try Autoblog's Car Finder to search for your next new vehicle. You can also use our search function to look up news and reviews on specific models. And we also have a Compare tool that lets you evaluate multiple cars side by side.
You'd also do well to go to the different manufacturers' websites, which usually allow you to configure a car, review trim packages and compare specifications. And sites like Kelley Blue Book and TrueCar offer information on the trade-in value of your old car and transparency into what others have paid for specific new vehicles in your local market.
Finally, you can visit IIHS to view independent crash-test ratings or SaferCar.gov to find official government versions, and look up EPA fuel-economy ratings.
Once you've identified your choice, Brauer recommends engaging with multiple dealerships online — almost all now feature real-time chat with sales associates — and indicating that your purchase is imminent. "It gives the consumer a lot of purchasing power," he said, the equivalent of saying, "who's going to give me the best deal?"