The online car buying market allows consumers to purchase new as well as used cars online through dedicated online platforms. Online car buying provides numerous advantages to consumers such as convenience of shopping from the comfort of their home, bigger inventory, availability of various financing options, and competitive pricing. It enables consumers to compare prices and select cars based on their preferences and budgets. The process involves selecting the desired car model and variant online, getting pre-approved financing, and home delivery of the purchased vehicle. Growing preference for contactless shopping amid the COVID-19 pandemic has further boosted the demand for online car buying channels.
The Global Online Car Buying Market is estimated to be valued at US$ 328.90 Bn in 2024 and is expected to exhibit a CAGR of 12.% over the forecast period 2024 To 2031.
Key Takeaways
Key players operating in the online car buying are American City Business Journals Inc., Asbury Automotive Group Inc., AutoNation Inc., CarGurus Inc., CarMax Inc., Cars and Bids LLC, Cars.com Inc., Cars24 Services Pvt. Ltd., CarSoup of Minnesota Inc., Carvago, Carvana Co., Cox Enterprises Inc., eBay Inc., Edmunds.com Inc., Hendrick Automotive Group, Lithia Motors Inc., MH Sub I LLC, Miami Lakes Automall, TrueCar Inc. The major players are focusing on strategic partnerships and collaborations to expand their presence and gain stronger footing in the market.
The Online Car Buying Market Trends for personal vehicles post-COVID-19 lockdowns coupled with rising consumer preference for online shopping has provided considerable impetus to the online car buying market. Shoppers are increasingly leveraging digital channels to research vehicle options and keep themselves updated on latest discounts and offers.
Technological advancements such as virtual vehicle test drives, augmented reality/virtual reality enabled car configurators, digital documentation of sale-purchase process have made online car buying seamless and hassle-free. Integration of AI and machine learning is further enhancing the online shopping experience.
Market Trends
Customized financing options as per consumers' requirements through integration of lending partners is a key trend witnessed in the market. Online platforms are offering loans at competitive interest rates to boost sales.
Transaction security and privacy are major concerns when purchasing expensive assets like vehicles online. Players are focusing on deploying advanced encryption technologies and multi-factor authentication to address this issue and gain customers' trust.
Market Opportunities
First-time buyers especially the millennials and Gen Z prefer online research, convenience and transparency offered by digital platforms. This presents an opportunity to target this niche segment.
Usage-based insurance schemes tailored as per online buyers' needs can be another value-added service to increase engagement and word-of-mouth publicity.
Impact of COVID-19 on Online Car Buying Market
The COVID-19 pandemic has massively impacted the growth of the online car buying market. During the pre-COVID period, the market was growing at a steady pace with increasing consumer preference for online car purchases. However, the imposition of lockdowns and restrictions on mobility led to a decline in physical car sales. Dealerships had to shut their showrooms temporarily or operate with limited capacity. This drove more consumers online to research and purchase vehicles virtually. Several dealers also ramped up their digital infrastructure and virtual sales capabilities to engage with customers online during this period. Online platforms witnessed a huge surge in traffic as people researched vehicles and negotiated deals from the safety of their homes. However, supply chain disruptions and cash flow problems faced by manufacturers initially led to lower inventory levels with dealers as well. This impacted the overall sales volume during the initial months of the pandemic.
As lockdowns are gradually being lifted post-COVID, the online car buying market is expected to bounce back strongly. while physical dealerships are resuming operations, consumer preference for contactless purchasing is expected to continue. Many people now feel more comfortable completing the entire car buying process digitally without need for in-person interaction. Dealers recognize this shift and are further enhancing their digital and virtual capabilities. Manufacturers are also ramping up production to meet the pent-up demand. The pandemic has accelerated the existing trend of online car purchases. Going forward, online channels are estimated to account for a significant portion of total vehicle sales.
Geographical Regions with Highest Concentration in Online Car Buying Market
In terms of value, the online car buying market is currently concentrated highly in the United States. The country accounted for over 50% of the global market value in 2024 owing to high internet penetration, widespread availability of online portals, and early technology adoption among buyers. States like California, Texas, Florida and New York contribute majorly to the US market. The large size of the overall car market in the country along with presence of tech giants and established portals have driven online car sales.
Fastest Growing Region for Online Car Buying Market
Asia Pacific region is expected to witness the fastest growth in the online car buying market during the forecast period. Countries like China, India and Japan are emerging as lucrative markets. Rising incomes, increasing vehicle ownership, proliferation of smartphones and focus of dealers/OEMs on digitalization will propel growth.China especially is anticipated to see exponential rise in online car sales attributed to presence of tech-savvy population and platforms like Autohome gaining popularity. Government support for EVs will further fuel growth. Overall economic development and growing preference for online purchases are positioning the Asia Pacific region as the fastest expanding market for online car buying globally.
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About Author:
Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. (https://www.linkedin.com/in/ravina-pandya-1a3984191)
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