People love to buy cars online, except for one thing

Walking into a car dealership can make you feel like a tasty little fish thrown into a shark tank. However, that is not the only way to buy a car. Half of car buyers surveyed by Progressive in January 2022 bought their cars online in the last two years.

The pandemic sparked a car-buying boom as people moved from cities to suburbs and eschewed public transportation and ride-sharing services. But chip shortages meant fewer cars were available, leaving dealers with very little inventory. Together, these factors fueled online car shopping.

(Image: Progressive)

Unsurprisingly, the lack of in-person upsells proved popular: 78% of respondents told Progressive that buying a car online was a very satisfying experience. Only 58% of those who shopped at a dealership rated their experience the same way. Although a legal tangle makes it impossible for automakers to sell directly to consumers in all 50 states, some (including Ford, Nissan, Toyota and Volvo) have created platforms that allow people to buy vehicles online through dealerships. There are also many online marketplaces that serve as virtual dealerships for cars of all makes and models.

Carvana is the top way people bought a car online (21%), followed by Cars.com (13%), CarMax (12%), dealer websites (11%), Carfax (10%), Auto trader (6%). and Vroom (6%).

Buying a car online has been adopted primarily by 18-24 year olds, with 77% of respondents in that age group reporting that it was how they purchased their vehicle. The younger the customer, the more likely they were to purchase their car online. 74% of those between the ages of 25 and 40 had done so, 53% of those between the ages of 41 and 56, 20% of those between the ages of 57 and 66 and 21% of those who were 67 years or more.

(Image: Progressive)

The main motivating factor for shopping online for 25% of respondents was the ability to find the car they wanted, next was price (21%) and then COVID-19 restrictions and comfort levels (14%) .

Buying a car from home gives people time to research their options, compare prices, and make a decision. Just over half (51%) of people who bought their car online visited three or more sites. The only thing missing when you buy a car online, of course, is the test drive. But buyers can always go to a dealer to test drive a car on the road. 48% arranged for a test drive online through a dealership, while 27% went to a dealership before making their decision (and presumably took a break before a salesperson could give them the hard sell). Most car buying platforms have a return period of about a week.

As satisfied as online buyers were with the process, they had suggestions for improvements, namely “better set terms for returning a vehicle”, “become more competitive in financing rate”, “shorter return window long” and “registration should be done faster”.