Traditional Pre-Owned Car Dealerships Face Online Onslaught
From Craigslist and Ebay Motors to dozens of other online buying services, car shopping seems destined to become a totally virtual transaction.
Targeting the pre-owned vehicle market – over $640 billion in 2015 sales– the tech sector is spawning companies applying Uber, Lyft and AirBnB style peer-to-peer technology models to take car dealers out of the equation entirely.
Companies like Shift, Beepi, Turo and Carvana have seen rapid growth as the fleet of quality pre-owned vehicles has rebounded from the industry crash in 2009.
Though eliminating dealer overhead and profit is compelling for both buyers and sellers, the service end of the equation is a major gap in the totally virtual car sales model.
Nearly 18 years ago local entrepreneur Dean Cafiero anticipated the potential of online sales when he founded CarVision.com. Having put nearly 50,000 pre-owned vehicles on the street using online lead generation and physical showrooms, he believes that there will always be a place for traditional dealerships.
While peer-to-peer sales models are effective, Cafiero says the service issue is a major obstacle, and ultimately people buy cars from people, making face-to-face interaction very important.