Hancock said it’s not technology that’s holding back online vehicle sales. It’s just taking Canadians some time to warm up to the idea.
Park agreed, saying Canada is about five years behind the U.S. market in terms of accepting a move to online sales.
One aspect that consumers tend to like is the price-you-see-is-the-price-you-pay policies, Hancock said.
According to the Canadian Black Book Car Buying and Trends study conducted by market-research company Ipsos, seven per cent of Canadians intend to purchase their next car entirely online.
But the study, released March 30, shows that figure rising to 12 per cent for Canadians 18 to 34, and when asked how likely they would be to purchase a car entirely online (including trade evaluation, financing and choosing options), 23 per cent of all Canadians and 36 per cent of aged 18 to 34 answered “somewhat likely.” Seven per cent of Canadians and 12 per cent of Canadians 18 to 34 answered “very likely.”
Hancock said the inability to test drive the vehicle before purchasing was identified by 70 per cent of respondents as a deterrent to buying online.
Winning over skeptics, he said — particularly people who like to see, touch and drive a vehicle before purchasing — requires a rethink in return policies. In the case of Canada Drives and Clutch, both companies are there. Each offers a no-questions-asked return policy: Canada Drives gives customers seven days to evaluate their purchases, while Clutch offers a 10-day return policy.
‘FULL REFUND’ OFFERED
Green said the seven-day policy gives customers a more comprehensive test drive than is typical with used-vehicle sellers. “You can put it in your garage, put in your car seats, hockey bags, drive to school, to work. You can really see if that vehicle fits your needs.
“If it doesn’t, we’ll come pick it up with a full refund.”
Both companies take trades and will provide a firm offer online. With Clutch, customers can enter the VIN of their vehicles and get a price, either as a trade-in or to sell to Clutch.
The companies also have clear guidelines about which vehicles they will take.
“We’re looking for a sixto seven-year average [age], less than 100,000 kilometres,” said Clutch’s Park. Green said 2012 is the oldest model year Canada Drives will accept.
There’s a double-edged sword to the notion of running an entirely online platform. Hancock said given the pervasive nature of cyberspace, such companies are particularly vulnerable to backlash from customer-service slip-ups.
“If somebody has a bad experience with your website, everybody will know about it.”