Buying a car online: internet trade booming

Going to a car dealership you trust, getting detailed advice, perhaps several times, agreeing on financing and buying the car on the spot – that used to be the case. At least, that’s what the figures from the German Association of the Motor Trade (ZDK) say. Apparently, the car trade is shifting more and more to the Internet, which is actually a logical development. This leads to two phenomena: some customers no longer need detailed advice at the dealership because they have already researched and compared on the Internet. Others, on the other hand, get advice at the dealership and then buy their car online – there is talk of so-called "advice theft.

Germans bought more cars again

volvo xc90

Fewer and fewer customers buy from car dealerships

The automotive industry has undergone a positive development in the past year. According to the ZDK, dealers and workshops recorded a total turnover of 156.5 billion euros in 2015, an increase of 6.2 percent compared to the previous year. Used car sales grew by 11.4 percent, new car sales by 4.5 percent. The positive trend will continue this year, predicts jurgen karpinski, head of the ZDK.

Strategy of own registrations

A distinction needs to be made when it comes to vehicle registration: in January 2016, 30.7 percent of all vehicles were registered privately for the first time. This is the result of figures from the Center Automotive Research (CAR) at the University of Duisburg-Essen. The number of so-called own approvals by manufacturers and dealers is higher, namely 35.1 percent. With such an own registration, the car is artificially devalued and can then be put on the market a short time later as a young used car. So the manufacturers push the prices, but bring more mass on the market, so as to increase sales. A small disadvantage for the customer: he or she must take the car as it was produced and cannot put it together individually from the range of equipment offered. For many, however, the savings are more important. According to CAR, the number of these own registrations has risen in recent years: they now account for one-third of all vehicles. according to "handelsblatt," carmaker kia is in first place in germany: in 2015, it allowed 42.5 percent of its cars to be sold to manufacturers or dealers for a short period of time.

Customers inform themselves on the net


These are good figures, but the industry is changing. Internet retailing is on the rise. According to ulrich fromme, Vice President of the German Association of the Automotive Industry (ZDK), customers used to go to the dealership five to six times to get detailed advice before signing a contract. In the meantime, the average number of visits would be 1.4. Often, visitors already have a precise picture of the model and equipment of their choice in their minds and therefore do not need any further consultation. Thanks to the Internet, consumers are also well informed about prices on the car market. But this also increases the pressure on car dealers.

More and more customers are buying on the internet

The other side: more and more customers don’t even go to the dealership anymore because they buy their car online. The number of dealers has already decreased: 18.000 brand dealers existed just a decade ago, says fromme. Now there are only about 7.800. In 2020, there will still be around 4.500 dealers give. It’s not just the automotive industry, the online boom is affecting almost the entire economy. So this is an unstoppable and entirely natural development? No, says fromme, with the help of the internet and attractive online offers, customers can certainly be attracted back to car dealerships again. At the moment it runs however still the other way around.

Consult the dealer, then buy the car online

Advice theft in the car trade

Many take advantage of the on-site advice and then buy the car cheaply on the internet.

Many potential buyers are going to the dealership to get advice from a competent dealer. On-site service also includes test drives. Then they go online and order the car they want from the cheapest provider. This phenomenon also extends to many other sectors and is described by ZDK head Jurgen Karpinski as "advice theft". the following method is particularly problematic when buying online: certain online brokers post cheap offers on the internet, but do not name the supplying dealer for this purpose. Only when the customer signs the contract does he find out which dealership would be responsible for him in the event of a complaint. In the worst case, this can be hundreds of kilometers away – not exactly customer-friendly.

Online cheap dealers remain anonymous

One phenomenon that is a thorn in the side of the ZDK and the established car dealers is the anonymous cheap dealers on the Internet. They buy cars in large numbers and sell them on to customers at a significant profit. This is only possible because they appear on the net without giving their location and name. Some manufacturers, including ford and opel, decided to boycott the market in 2014, but this was rejected by the German Federal Cartel Office at the end of last year. Further talks with the authorities will follow, however, assures fromme.

3 thoughts on" buying a car online: internet trade is booming"

  1. Neeltje27. August 2019 at 7:49

It is interesting that the used car trade has increased so much in the last few years. I am thinking about buying a KIA used car. Maybe I will also look online.

I am sure that internet has already changed and limited many areas, but I think that many companies are not yet fully exploiting the huge potential of internet. I believe that digitization can be an important tool for car dealerships. For me a personal consultation is necessary, especially if it concerns cars.

Incredibly, the number of brand dealers has risen from 18.000 on 4.500 has dropped. I prefer to get advice, buy or sell in a car dealership, because I have always had good experience with them. Because I want to buy a new car in regensburg, I am still looking for an experienced car dealer in my area.

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