Finance Consumer Buy a car from your couch: Digital dealership hopes to disrupt industry

Buy a car from your couch: Digital dealership hopes to disrupt industry

Indian startup CARS24 hopes more Australians will buy a used car from their couch. Photo: CARS24
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A fully online car dealership has joined a host of other platforms making it easier than ever for Australians to buy a car with the click of a button.

Indian startup CARS24 is “100 per cent online” and recently arrived in Australia to compete in the used car market with Carconnect, BuyYourCar, and Carsales Select.

CARS24 owns all the cars it sells and says every car listed “has been thoroughly inspected, test-driven and refurbished”.

It also offers a six-month warranty on every purchase and allows buyers to return their car within seven days of purchase.

Add car to cart

CARS24 chief customer officer Erin Williamson reckons the car dealership industry is “ripe for disruption” after years of little innovation.

She said the convenience of the platform appealed to car buyers of all ages and saved them from having to go to “endless inspections” on weekends.

CARS24 offers a selection of used cars found by its sourcing team from auctions and “like-minded partners”.

It also offers a trade-in service through which the company expects to source about 30 per cent of its cars in future.

“We own and personally deliver every car that we sell,” Ms Williamson said.

“We don’t outsource to third parties. We are not a marketplace. So the customer experience is completely in our hands.”

The company provides free delivery up to 100 kilometres outside of Australian capital cities and says it is looking into a “discounted” delivery service in regional areas.

To give car buyers peace of mind, CARS24 says every car have to pass a 300-point inspection and comes with a six-month warranty, a seven-day free return, and a refund policy.

The company says the refund includes the price of the car and charges like government fees and taxes.

A ‘fringe sport’

ACA Research director Steve Nuttall said in theory, the “hassle” of buying cars from physical dealerships should make the online market popular.

He said consumers disliked “pushy” salespeople and the time it takes to buy cars in person.

But they are nonetheless still “clinging onto the in-person dealer model” due to lack of trust in the online experience.

Mr Nuttall said a report by ACA Research earlier this year found 0 per cent of 1480 Australians surveyed had bought a used car online.

Of the 1 per cent that selected ‘other’, none said they had bought a car online when prompted to provide more details.

He said doing so was still “very much a fringe sport”.

“Everyone’s just fearful of buying a lemon,” Mr Nuttall said.

“There’s a lot of lemons out there … and then you’ve got to go and sell that lemon on to somebody else.”

A survey by ACA Research suggests few Australians are buying cars online.

Mr Nuttall said he felt the online market worked better for new cars because buyers have access to more information.

“You can do a lot of really good online research. There’s … all the reviews in the world that you could ever want to look at.”

Mr Nuttall said car buyers often need a large inventory to choose from, as well as price comparisons, long warranties, and third-party checks to feel comfortable about making a purchase.

“All of that can be built into an online experience, but … it takes time to build up the trust.”

Will all dealerships go digital?

Although Mr Nutall believes brick-and-mortar dealerships will be around for a while yet, he said digital competitors will force them to offer an “omni-channel experience”.

“[People will] have the choice of going in to a dealership, but it needs to be better integrated into the digital experience,” he said.

A national survey conducted by CARS24 and Pureprofile found 76 per cent of Australians want technology that will improve the online car-buying experience.

Ms Williamson said the expansion of big brands into the online market showed car buyers were ready for change.

“[CARS24) know that our mission is to focus on the used car, because that’s the experience that really needs transformation in the Australian market,” she said.

“It’s only a matter of time before [digital car dealerships] become the everyday norm for Aussies wanting to buy a used car.”