‘The Future of Car Retailing’ market report also found that while 45 per cent of people would complete the whole vehicle purchase online when buying on finance, the majority would still speak to a dealer before completing the online process. 

The survey said the average car buyer believes it would be nearly 20 years, on average, before a car is bought completely without human intervention. 

Having said that, Auto Trader added that the move to a multi-channel retail system would be vital to a dealership over the next decade. 

Auto Trader’s chief executive in the UK, Nathan Coe, told industry news outlet Automotive Management that dealerships will remain central to automotive retailing. 

But he said they would have to evolve “as the ‘one size fits all’ approach is fast becoming redundant”. 

“Retailers will need to adapt to provide a blended experience for consumers so they can choose the right journey for them, be it online or offline, or any combination of the two,” he said. 

Meanwhile, Automotive Management says that online vehicle sales around the world are expected to exceed one million units in 2020 and consultancy firm Frost & Sullivan said that figure would increase by six times by 2025. 

It said in a report that more than 618,000 vehicles were sold around the world using online systems in 2018, almost double that of 2017. 

Car-makers who are actively involved and plan to boost their online sales presence include Hyundai, Polestar, Tesla and Volkswagen. 

Mercedes-Benz also said that it expected 25 per cent of its new-car sales would be completed by online transactions by 2025. 

UK dealership group Peter Vardy Group last month said that it forecast that half its car sales would be done online by 2023. 

In the Auto Trader report, CEO Peter Vardy, which uses a UK dealership online product from SilverBullet, said he had been “blown away with the result” of the move into an online program. 

“The customers love being in full control of building their deal and for us, the retailer, we are seeing a significant increase in finance penetration (92%), margin (12%) and an additional profit per unit on top of a 50 per cent reduction in time spent in showroom,” he said. 

“With emergence of online-only motor retailers, we believe it would be naive to think that all consumers are ready to fully commit online which is why we feel it’s vital to adopt a more blended retailing experience whereby the consumer can seamlessly transition from online to instore.” 

He said the digital approach should also complement the traditional dealership experience and involves “having the right people in the right roles to support the process”. 

Mr Coe said: “The future is about digitising the ecosystem to enable retailers to move to a less labour and property intensive model that better serves car buyers. 

“Successful retailers will embrace technology, invest equally in their online platform as they do their physical one, and re-evaluate the physical elements of their cost base to run more efficiently.” 

Auto Trader said that all car retailers, regardless of size, will have to adapt to a new way of retailing which will include the introduction of online payments. 

Its report said there were three main areas where car retailers needed to channel their investment in order to succeed in a new omni-channel car retail environment:

• Buying and pricing: Retailers who use data to complement their own expertise can ensure they stock the most desirable cars and then price them according to the market. This creates a more transparent customer experience and increases stock turnover. Digital auction products will also make buying new stock more efficient.
• Sales: To complement online transactions, the physical sales experience needs to be aligned to the online journey. Auto Trader research shows car buyers need to complete about 28 tasks to complete a car purchase. Sales staff need to find where the car buyer is at on their journey and pick up the missing pieces rather than trying to start from the beginning when entering the dealership.
• Finance: Allow customers to be able to complete as much of the finance process as possible before visiting the dealership. With about 90 per cent of new cars and around 30 per cent of used vehicles bought using finance, dealers need to make finance front and centre online and offline.

By Neil Dowling