Are Dealerships Doomed? New Car Buying Survey Reveals A Powerful Trend

An overwhelming majority of buyers want to purchase their next car online in some form, according to a recent survey conducted by AutoGuide this spring. We found 78 percent of respondents would prefer to buy a car completely or partially online, with just 22 percent preferring the traditional in-person dealership as their only option.

AutoGuide conducted the survey across VerticalScope’s Fora communities platform, revealing a strong preference for online purchasing; 42 percent of respondents preferred to buy totally online, with another 36 percent looking for a buying experience with both online and dealership elements.

The survey highlighted the traditional challenges and uneasiness many consumers have with dealers, including frustration with pricing transparency, interactions with salespeople, and finance department tactics.

“The data is clear—consumers want a simplified buying experience online,” VerticalScope Editorial Director Greg Migliore said. “People want to buy a car like they buy nearly every other consumer good.”

This has led consumers to be increasingly comfortable with handling key elements of the buying process online— including their trade-in—and foregoing a test drive if they are already familiar with their new vehicle choice.

“I bought my last two cars sight unseen. Sounds scary, but it is not,” Hyundai-Forum user EdP wrote. “One was the same model as the car I was already driving, just the newer version, different color. I know all the differences in the tech, but drivetrain and seating were identical.”

That said, more than one-third of respondents want some form of live interaction with the vehicle they are trying to purchase, with a hybrid model blending online and showroom experiences the choice of many. This could also offer opportunities for dealers to make their buying processes more efficient and reach new customers.

“Both. Price and select online, then go to the dealership to inspect the car, handle paperwork, and drive away. Since the price has already been set, there is no "haggling,” TeslaOwnersOnline user Klaus-rf wrote.

VWVortex user Alandesco echoed those thoughts: “I would like to view the car, test drive, see options, get info at the dealer. Then be able to get and settle on a fair fixed price online, and track the shipment. Finally, I would like to inspect the delivered vehicle, pay, and take delivery at the dealer, with no dealer add-ons to the price.”

Consumer purchase methods have changed dramatically in the last decade, as online retailers and digital payments have made the auto industry more of an outlier in the U.S. economy with its traditional dealerships with negotiations that are core to the buying process. Supported by franchise laws in most states, dealerships have not had reason to change. As Millennials and Gen Z, most of whom have made major purchases online, take over greater portions of the new car market, the industry will likely need to consider change.

“There are opportunities for dealerships to lean into a hybrid model, but our survey shows that if customers had their way, the days of relying solely on in-person purchases are numbered,” Migliore said.

Still, 22 percent of respondents—nearly a quarter of those surveyed—prefer a dealership experience, which offers a personalized approach and up-close access to the vehicles. Dealers have made strides in making their stores more welcoming and de-emphasizing confrontational negotiations.

“Everytime I’ve been to a Cadillac dealership over the past 25 years, they’ve treated me like a king. I want the full experience. One-hundred percent Cadillac dealership > Online,” a CadillacForums user wrote.

Forums supporting electric brands like Rivian (74 percent), Polestar (65 percent) and Tesla (65 percent) – which offer processes that can be mostly or entirely done online – had the strongest support for Internet-only experiences. Cadillac (57 percent) and Toyota (44 percent) forums indicated their preference for dealerships.

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