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RIP old-school car dealerships: 6 ways that car buying has radically changed
by Bradley B. • January 9, 2019

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More than half of Americans feel anxious about visiting a car dealership. Three out of five consumers feel like they are being ripped off in some way. Those are some of the findings from a 2016 Harris Poll, but it didn’t take a survey for you to know that. For generations, consumers have been annoyed (if not outraged) by aggressive dealership sales staff, unhelpful test drives, and the excruciatingly drawn-out process of negotiating a price and signing paperwork.

Fortunately, these six trends have emerged to remake car shopping for the better.

1. Pricing Transparency

Car buyers no longer stroll into dealership not knowing what car they want or how much to pay for it. Those days are long gone thanks to car shopping websites like TrueCar and KBB that provide detailed numbers for the average transaction amount, dealer invoice, and a fair purchase price for your desired model. Pricing transparency wrests power from the dealership and drops it into your hands. Don’t like the deal you’re being offered? You’re just a click or two away from using those same numbers to buy a car at a competing location. Dealerships are keenly aware of this shift in power, so they are bending over backward to earn your business.

2. Massages, Espresso Bars and Other Amenities

Big Two Toyota in Chandler, Ariz. offers perks that you might otherwise expect from a luxury spa. There are massages and French manicures. Fresh food is served up by in-house chefs. The dealership has its own barbershop and business center with free Wi-Fi. Kids can be occupied in a 700 square-foot that looks like a pirate ship. Free shuttles will take you to nearby shopping. It’s part of a major trend in which dealerships across the country are ditching stale doughnuts and burnt coffee for alluring amenities. These days you can find luxury dealerships providing on-site espresso bars with dedicated baristas, constructing doggie parks for customers with pets, and hosting art exhibits and fashion shows—anything to make dealerships more pleasant.

3. Boutique Locations

A decade ago, the average car shopper used to make an in-person visit to about five dealerships before choosing a car. That’s dropped to only one visit to a dealership during the entire car-buying process. Realizing that it’s increasingly difficult to get car buyers to visit their location, dealerships are now setting up retail experiences where foot traffic already exists. Tesla, the electric-car manufacturer, started the trend with its retail locations that resemble an Apple Store. Volvo’s new electric car brand will soon set up Polestar Spaces—co-located in stores selling high-end clothing or home furnishings. BMW and Mercedes have launched pop-up stores in fancy malls as a way to introduce a new model or showcase a halo model. All these retail locations have a much smaller footprint than a conventional dealership and only put two or three vehicles on display. These locations even give you a chance to make a purchase via a digital kiosk.

4. Vending Machines and Other Quick Deliveries

Not every car-selling fad will be around for the long-term but here’s an idea that could be a surprise hit: the car vending machine. Carvana, the online service for buying used cars, built dozens of them in locations spanning Arizona, Florida, Indiana, Maryland, North Carolina, Ohio, Pennsylvania, Tennessee, and Texas. After you buy the car online, you then visit a vending machine—which is a glass tower about seven to 10 stories high and housing several dozen cars. Consumers insert a token into the vending machine, which robotically delivers your new ride to the street level where you drive off. Too wacky? Ford doesn’t think so. In 2018, Ford set up a similar delivery method for car buyers in Guangzhou, the sprawling port city in Southern China. Consumers buy a car using an app and schedule a pickup time. The vending machine identifies the customer by looking at a selfie snapped during the buying process.

5. Concierge Service

Damerow Ford in Beaverton, Ore. makes this cool offer on its website: “Interested in test-driving one of our vehicles? Contact us, and we’ll coordinate a time to deliver the test drive to you.” The same offer is available from the Land Rover dealership in San Francisco, the Volkswagen dealer in Gaithersburg, Md., and just about every Hyundai in the United States. Concierge test drives are just the beginning. If you buy a vehicle from AutoNation, the country’s biggest dealership group, the whole purchase process can be completed at your home. In other words, the dealership delivers your new car right to your door. And when it comes time to maintaining or repairing your vehicle, the dealership arranges for the pickup and return of the car to get your car fixed up without taking any of your time.

6. Don’t Buy, Subscribe

In the trend that’s most likely to radically alter traditional car dealerships, motorists are opting for access over ownership. As you know, Millennials are postponing or entirely giving up the idea of getting a driver’s license. It makes sense when you consider the wide array of mobility options available these days—from ride-hailing and car sharing to dynamic shuttles and on-demand scooters. Moreover, young people realize that these mobility services offer a cost advantage compared to purchasing, financing, fueling, insuring, and maintaining a personal vehicle. And for those who still want a car available anytime in your driveway, there are car subscription services. It’s a hassle-free, low-commitment alternative to car ownership. Ford’s Canvas, Care by Volvo, Carpe by Jaguar Land Rover, and Access by BMW are examples of all-inclusive monthly subscription services. And in a sign that everything comes full circle, Canvas customers in Solano County, north of San Francisco, can subscribe to a car—and then conveniently pick it up at the Ford dealership in nearby Fairfield, Calif.