Is Retail Automotive Shifting Towards Online Purchases?

Is it possible for a customer to get in and out of a dealership in under an hour? We discussed this matter previously as Sonic Automotive was undertaking this tall task. Sonic even reportedly targeted a 45-minute transaction; a number that has proven difficult to reach. Next up is AutoNation. In an interview with CNBC, AutoNation CEO Mike Jackson said, “They don’t want to drag themselves from store to store for selection discovery, price discovery and they want a real car and a real price, online.”

The remarks from Jackson come weeks after he spoke out about both Tesla and GM. He’s clearly an executive that isn’t afraid to share his opinion, or in this case try something new. Jackson spoke in a manner that seemed to sympathize with customers who may not want to drive around shopping dealerships in person.

Jackson wasn’t alone in his analysis. Jesse Toprak, chief analyst with Cars.com agreed. “Car buyers are tired of spending two or three hours in a dealership, this might be a better option for people used to buying so many things online,” Toprak said.

One thing to clarify is that AutoNation’s aim is to allow the customer to spend less time at the lot; however, the entire transaction won’t take under 45 minutes. What they are trying to do is to move part of the transaction time to the customers’ homes where they can find a car, negotiate on price and start financing and other paperwork before they get to the dealership. Reports indicate that if a customer completes all paperwork before entering the dealership they could be in and out of an AutoNation store in about 30 minutes. More complicated credit concerns, or trade-ins will up the amount of time spent with the dealer.

Do you think that dealerships should be trying to cut down the time that a customer spends at their store? If AutoNation pulls this off, will they have a competitive advantage over other dealers? Do you think that a shift towards online paperwork is going to happen and is it a positive or negative?