21 January 2020 Concept Car
The Internet has changed just about every aspect of our lives. But one of the areas it has hit hardest has been the used car market.
This must come as a surprise even to the most optimistic industry insiders.
Certainly, few would have suspected that selling and buying something as expensive, personal and risky as a second hand vehicle online could turn into a mainstream phenomenon within a mere decade.
And yet, that’s exactly what’s happened.
Let’s take a look at all the different ways the digital marketplace has made an impact the car segment.
Before the advent of the web, buying a car was a thoroughly unpleasant affair.
Not only was it time consuming. Not only did you need to haggle about the value of your trade-in as well as your new vehicle. And not only did you need to keep an eye out for ill-meaning dealers.
Most of all, you could never be quite certain if there wasn’t a better deal out there for you somewhere. Sure, there were plenty of classifieds in your local newspaper. But these offered very little information on the actual state of the car in question. Very often, they were badly organised. And the danger of getting ripped off was obviously a lot bigger than it is today.
Dealers know they’re no longer just competing against other local dealers, but various online alternatives thousands of private sellers as well. As a result, their service mentality has significantly improved. So have their prices and the quality of their financing.
And if you want, you can even arrange a trade-in online and buy your car through a website without any need for haggling.
We often speak about the web and reality as two different things. In truth, these two areas mutually influence each other. And they have transformed the market for used cars for the better.
As indicated, the most important thing the web has give every single consumer is more knowledge:
More knowledge means more empowerment. The more you know before taking a decision on which used car to take, the better that decision will be. And no invention in the history of mankind has given you access to more information and knowledge than the Internet.
It’s one of the first lessons in economics: The more choice you have, the lower prices will be. This is certainly true for the used car market as well.
Ever since buying cars online became a reality, prices for most models have dropped significantly. These days, you can get excellent deals for pretty much every car you’re interested in. The only limitation is that you search long enough and aren’t only looking for the latest or most popular models.
One of the greatest things of the online used car market is that it has enabled you to search beyond the borders of your immediate surroundings. Especially if you’re looking for somewhat pricier models, it can pay off to drive a few miles more to get a better deal. As many experts have repeatedly stressed, regional price differences for the exact same model, can be enormous.
Purely logistically, this was simply unthinkable prior to the web. No one was seriously going to spend a week on the road travelling from dealer to dealer to get the best deal. Today, you can take the same trip by just browsing the web for a few hours. Needless to say, this is an extremely powerful tool in terms of finding the cheapest car.
This doesn’t just hold true for the cars themselves. Financing, too, has become more attractive and, most of the time, more secure. All in all, this is great news if you’re looking for a used car on the Internet. (We’ll get to the downsides of the equation towards the end of the article)
As we mentioned, buying a car was traditionally a pretty risky business. It still is.
Unless you’re a true expert, buying a lemon remains a very real possibility on the second hand market. Spotting obvious defects is only one aspect of this. A lot of the actual value of a car is determined by the wear and tear, by the condition of elements like the breaks, the engine, the tyres. Arriving at a realistic verdict remains hard.
Almost every single model has certain weak spots, regardless if you’re looking for a KIA or a Mercedes. Freely available expert and user reviews provide a much more precise picture of where and what to look for. You can even search for problems relating to just one particular model generation.
All of this means you no longer rely on potentially bought reviews by car magazines.
Ripping customers off, too, has become harder. No dealership can risk getting too many negative reviews. And by paying for at least part of the car by credit card, you can buy additional buyer protection for yourself. All of this has made the used car market in general a much safer and better place.
When people describe the buying process for their car as stressful, they are not talking about choosing the right model. That, in fact, can be quite agreeable. What tends to be far less agreeable, is the interaction with the sales person, be it a dealer or a private seller.
The reason is simple: Most people don’t enjoy fighting over prices. This despite the fact that, repeatedly, studies have found that haggling leads to better outcomes almost in every single case. And don’t you just abhor the final stages of a deal, when you sit down with the financial manager? Instead of just getting down to business, they will often bombard you with a barrage of products and services you neither like nor need.
And then, there’s all that fine print to get through!
It’s little wonder, then, that many actually welcome the fact that the web has made everything more anonymous. Precisely because you don’t need to deal with real people unless you want to, the experience has become pleasant for many. You can take care of all details from the comfort of your seat and, when faced with bad manners or aggressive sales tactis, simply opt out.
Nothing’s easier done than removing an item from a shopping basket, after all.
One of the first industries to be transformed by the Internet was the music business. And one of the big keywords for the music scene was ‘back catalogue’. In an interesting twist of events, that term is quite apt to describe the development of the used car market, too.
What are we talking about here?
Essentially, the back catalogue in music was the huge archive of older recordings. Record stores would no longer stock them, but there were still plenty of people interested in them. The Internet allowed labels to keep selling these recordings. This was a great deal for them, but it was also good news for consumers.
Why?
The used car market also has its back catalogue. After all, there are plenty of cars from the 80s and 90s out there. These are not old timers, just cars with a few more years under their belt.
Not all of them have aged equally well. Many of them, however, still drive just fine. Questions of taste aside, they can be a very interesting alternative to more recent models.
Regardless of your fancy, you can almost always get exactly the car you want. Dealerships can only stock so many cars at a given moment. But if you expand your search to include neighbouring areas and private sellers, almost everything is now available.
The same goes for more ‘exotic’ choices. In fact, one could argue that the web has been instrumental in the breakthrough of brands like Dacia, Kia or Skoda.
Whereas these brands suffered from a questionable image in the pre-digital age, they carved out a niche and cult following thanks to the web. In forums, drivers shared their experience with those in doubt. And quite often, their reports were far more positive than expected. This made it far easier to take the leap and go for a more unusual choice.
Today, many of these ‘unusual’ choices have become mainstream cars.
On the downside, it has often made smaller brands more expensive. All in all, however, the net result has been thoroughly positive.
The relentless competition on the digital marketplace has meant that even tiny dealerships and private sellers now approach the game with utmost professionalism. No seller who intends to remain on the market for a longer period of time can allow to disappoint customers for very long.
Of course, this doesn’t mean that all sellers have turned into charitable institutions over night. They still want to make money and will try to get the best possible. But it can not be denied that many aspects of the process have significantly improved and become more professional.
As with everything else, the Internet hasn’t just had a positive impact on the used car market. One of the most notable effects has been the flattening out of prices. Although we just argued that you can get better deals across the board, it has simultaneously become harder to get truly amazing deals. Walking away from a dealer knowing you have just saved thousands of Pounds has now become almost impossible.
Why is this?
Simply put, the Internet hasn’t just increased knowledge on your end. It has also given sellers more opportunities to fine tune their offers. By comparing their prices with those of other dealers, they will try to find the sweet spot within an accepted range of prices. In a way, the market gradually develops fixed price expectations. Setting the price a lot higher will make it hard to sell the car. Selling it a lot lower will raise suspicion.
Is this a bad development? We’d say it depends. For experts, it means less super deals. For most buyers, however, it means slightly better prices than usual – and less risk of missing a truly outstanding offer.
The Internet has made it far easier to compare information. With just a few clicks, you can access huge amounts of data. Only getting fractions of this would have taken you days in the past. Clearly, then, buying a car has become faster thanks to the web, right?
Wrong.
In fact, even buying the simplest, everyday households items can take ages online. The reason: Even though procuring information was a lot harder in the past, it was finite. There was a natural end to the process, after which you’d gone though all the options and it was time to take a pick.
As we mentioned earlier, you would simply not even consider scouting dealers outside your immediate surroundings. Now, this has suddenly become an option. And even considering whether or not to make use of it is going to cost time.
The choice is dizzying.
And that’s not all. Each car on offer comes with detailed pictures and informative descriptions. Each dealer can be scrutinised thanks to user reviews and forum discussions. And for each model, you can spend days gathering information on what to look out for and what to be take into consideration.
For those with a lot of patience, the web offers many benefits. But you will need some stamina to make it through the wealth of information – and don’t let yourself become discouraged.
At the same time, things are moving extremely fast online. If a great offer does appear, you will need to act fast. There’s a very big chance that others are looking for the very same car as you and may be looking at the very same offer at the very same moment.
You will need to move fast if you intend to get what you want.
This creates a real dilemma: On the one hand, the web invites you to really dive deep into a particular topic and to take your time. On the other hand, it forces you to take decisions very quickly, sometimes within seconds.
The best approach, from our perspective, is this: At first, take your time to research more general aspects. In our blog, for example, we have plenty of articles on which car is right for you and which type of finance is best. Become an expert. Research what you want to know and decide on a handful of models that seem like a good choice for you.
Then, spend a few days analysing the market to get a feeling for what constitutes a good and a bad price.
Finally, decide which cars you really want and what you’re prepared to pay for them. Then, start looking for real and be prepared to move quickly.
One thing every experienced car buyer will tell you is this: No matter how many high-definition photos come with a car ad online, you really do need to see a car in person before taking an informed decision.
Unless you do this, you won’t be able to get a feeling for the car. And without at least looking at it, you won’t spot potential problems.
This is why we still hold on to our Manchester showroom. Here, you can take a seat behind the wheel, hear the sound of the engine and ask everything you ever wanted to know about the car at hand. Here, you can truly fall in love with a model.
That said, before you drop by, it makes sense to visit our digital showroom first. We have many great choices in store for you and new offers are coming in almost every day. Take a look – we’re sure you’ll find something of interest!
21 January 2020 Concept Car
