The Future of Car Dealerships

Red car sitting on car dealership lot.

Uber Eats, Amazon and Netflix are great examples of businesses that have adapted to suit the way that people consume. They have jumped ahead of the curve and guided their respective industries in growth and development. 

Just like dining, shopping and entertainment, the car buying experience that people prefer is changing. The future of car dealerships is changing, and we are here to help you stay on the front edge of the curve as the industry evolves.

How People Shop for Cars Today

People like convenience, which is why online shopping is so popular. The same convenience is preferred in the car buying experience, which is why we’re predicting quite a few changes in the future of car dealerships.

Today, people have a few options when shopping for cars. Some people are into the more traditional experience of going to a dealership, choosing the one that works best for them and then figuring out the best price with a salesperson. 

Other people buy cars in showrooms. For several years, Tesla allowed their customers to shop in showrooms for a while before deciding to go fully online. But this sort of shopping was pretty interesting. 

People could test drive an existing vehicle then build their own on one of their computers. You could ask a representative for help, but there were no commissioned salespeople. All prices were set in stone.

Tesla has since ditched the showrooms and moved to exclusively online ordering. This is not the only company that has the wheels turning in the online car shopping world. 

Many people like to shop for cars online because they can learn almost everything about a car with just a few clicks and scrolls. Browsing from the comfort of your home rather than feeling pressured at a dealership completely changes the car buying experience.

The Reality of Online Competition 

Person shopping online

There are companies in the automobile industry that are operating completely online, and they are making a killing. Consumers can browse new and used cars, learn cars’ histories, bid in auto auctions and even customize a new car all online. People who are comfortable buying a car without test driving it can purchase a car and have it delivered straight to their homes. 

The auto industry is moving online slowly but surely. This is not to say that the internet will kill off car dealerships. But it does go to show that car dealerships must evolve in order to continue to prosper.

The Struggles of Running a Modern Car Dealership

Fancy car on dealership lot

You may have a large list of older customers that have remained loyal to your business for decades and don’t mind your “old school” ways. But once the younger millennials and Gen Xers are buying cars, you can expect things to be a bit different. 

One of the biggest struggles of running a modern car dealership is keeping up with the ever-changing technology that comes with this era of convenience. You need to have a software or system that allows your customers to shop with ease.

The tricky part is figuring out how to make things easy on your customers, but not so easy that makes them feel like they can eliminate you from the process.

What it comes down to is finding balance. Car dealers are challenged to become more transparent and less pressing. They have to become as convenient and pleasant as the online car buying tools in order to retain their customers’ loyalty. 

How Shared Wealth Affects the Car Industry

Man driving ride share taxi

There is another major trend that may be a threat to traditional car dealerships: ride-sharing. 

Times truly are changing and owning a car is not completely necessary. Many people are coming to realize that a car is an expense, not an investment. 

People will probably always own cars because, aside from their practical purpose, they are considered a symbol of wealth and status. But those who are able to rely on public transportation or have location-independent occupations simply do not have a need for their own car.

The price of gas, auto insurance and maintenance on top of monthly car payments can be a lot, especially for young people who are trying to get ahead while trapped under tons of student debt and really anybody else who experiences financial hardship. 

Car subscriptions, such as Zipcar, often come to save the day. For a small monthly fee of as little as $7 a month, subscribers can pay a flat rate to borrow cars on an hourly or daily basis. 

The decreasing need to own a car could definitely throw car dealers for a loop and is something that needs to be carefully considered.

How to Get Ahead and Stay in Business

Three nice cars behind glass at car dealership.

You know the theory of survival of the fittest? This definitely applies to businesses. You have to constantly evolve to fill a void in order to stay in business. 

If you want your car dealership to stay in business and continue to prosper for many years, evolution is your only option. Your free popcorn and branded merch are cool, but that isn’t what will keep your customers around for the long haul.

You need to mirror the online car buying experience from the second a potential customer walks through your doors. Be there to help them without pressuring them to buy. Be very transparent, because there is a good chance that they’ve researched the cars on your lot. 

Keep in mind that the customers probably know that they want to buy a new car, so convincing them is not necessary. An overbearing salesperson may be the last straw for your client. 

A major change that some successful car selling companies have made is eliminating commission for salespeople. This makes your people on the floor less hungry for sales which will allow them to back off a bit.

Outdoor used car dealership lot

You may be thinking, “Uh…but I want those sales.” However, with the direction that the industry is going, you’ll be glad that your sellers were less pushy for that one extra sale. Your buyers will remember that they were not looked at as a dollar sign but as valued customers. 

In addition to changing your sales techniques, perhaps consider offering additional car-related services to stay with the times. Figure out how to support the trends of car-sharing or ride-hailing. 

It is 100% possible to continue to flourish in your industry if you play your cards right. You just have to get creative. 

Moving Forward

The bottom line is this: you have to give your clients what they want in order to stay in business. If you don’t want your business to rely on the sale of parts and repair services, you have to evolve to be what the people want. 

Whether you choose to create new services to better serve your clients or redefine your car selling approach, the power to succeed for years to come is all in your hands.

It is time to create a new and improved driving force to push your business towards success. What move will you make to ensure a prosperous future for your car dealership?

Written by:

Roman Massey

Roman is the owner/operator of Raxxos. He has a blend of strong technical skills, business acumen, a love for people, and impacting the world in a massive way.His superpower is creating efficient/automated business systems and empowering businesses with technology.He contributes to his local community and is part of many entrepreneur and digital nomad groups.He owns a Triumph Bonneville motorcycle which he enjoys riding.. Everywhere.

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