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GM to Allow Consumers to Buy Cars Online

October 8, 2013

By Stephanie Forshee

DETROIT — General Motors will soon give more car buyers the option of avoiding dealership showrooms with its new Shop-Click-Drive program. Expected to roll out nationally by the end of the year, the option allows customers of participating GM dealerships to purchase or lease a vehicle online.

The program was piloted in Michigan in early 2013 and is currently available at about 100 participating dealerships in Alabama, Arizona, Minnesota, North Dakota, Oklahoma, South Carolina and Wisconsin. Ryndee Carney, company spokesperson, said the program should be available to GM’s entire dealer network by the end of the year.

Customers who visit a dealership website are prompted to “Create Your Deal” after selecting their vehicle of choice. Participating dealers must offer a concierge service to allow customers to test drive and potentially take delivery of a vehicle.

The announcement comes at the height of Tesla Motors’ legal battles with car dealer associations and legislators in various states over its direct-to-consumer business model. Dealers have argued that Tesla’s retail strategy, which allows consumers to buy directly from the carmaker online, violates state franchise laws.

“It’s completely different than Tesla, because the customers are buying the vehicles from dealers, not buying them from the OEM, not buying them from General Motors,” Carney said. “So the vehicle sales transaction must be completed by the dealership; the dealer controls how the application works on his or her dealership website, so it’s compliant with franchise laws.

“Just as they are today, they’re buying the vehicles directly from a dealer,” Carney added. “They’re just able to do more of the transaction online if that’s how they want to interact with the dealer.”

A Tesla spokesperson declined to comment on this article.

Although the focus is to help consumers complete more of the transaction online, Carney says only 500 out of the 900 transactions registered during the testing phase were completed online. 

“It’s a big-ticket item, and I just think they feel more comfortable having a personal relationship with their neighborhood dealer when they make a purchase that large, but research cumbersomely does show us — especially among Millennials who are more comfortable purchasing anything online — they prefer to do more business online,” Carney noted. “So this is just another option to try and enable dealers to be able to either reach new customers who may not be visiting their dealerships or to satisfy the increasing number of customers who want to do more online.”

Comments

  1. 1. William V. Fowler [ October 08, 2013 @ 01:24PM ]

    Carney said. “So the vehicle sales transaction must be completed by the dealership; the dealer controls how the application works on his or her dealership website, so it’s compliant with franchise laws.

    My company has developed a webbase software services that brings the dealer, customer and financing source the ability to come together and communicate together over the Internet to complete the loan process. This allows the dealer to compete the whole deal live over the Internet, and the customer can come to the dealership to pick up the vehicle.

    By the way it is done in full compliance. Got to this location to learn how to comply with the CFPB during the loan origination process: https://www.enetfs.net/en/Sales/1_Main_Points.pdf

  2. 2. Tarry Shebesta [ October 09, 2013 @ 10:52AM ]

    Unfortunately the payment part of the process does not set a realistic expectation of actual payments the shopper would receive as this process is not based on their actual credit.

  3. 3. Rebecca Chernek [ October 19, 2013 @ 08:20AM ]

    Is your F&I department prepared for the online shopper if not it can cost you - learn how to effectively work with the online shopper and significantly increase profits. Ignoring the times is not the answer!

  4. 4. Aaron Dunham [ October 21, 2013 @ 04:31AM ]

    This is an excellent read and it definitely speaks of and how this generation of new and pre- owned vehicle buying is trending, but DealerTrack is already doing this and it does use actual credit score, rates, risk duals and even rebates to figure payments!

  5. 5. Anthony L [ November 04, 2013 @ 09:38AM ]

    Welcome to Walmart for Auto buyers...the "death" of the industry and jobs is at hand...

  6. 6. Gary Fields [ November 08, 2013 @ 07:50AM ]

    Watch for new solutions that will keep the relationship with the dealer in tact while providing the consumer with a better experience online or in the showroom with the f&i piece of the shopping / purchase experience. Make it easier and more transparent for the consumer and the your dealership will see the benefits. And it will be compliant and based off of actual consumer info, credit scores rebates etc.

 

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