June 22, 2024
Online Car Buying Market

Online Car Buying Market is Trending towards Digital Transformation

The global online car buying market is estimated to be valued at US$ 751.83 billion in 2024 and is expected to exhibit a CAGR of 12% over the forecast period from 2024 to 2031.

Online car buying allows consumers to browse new and used vehicle inventories, get price quotes, calculate payments, and submit credit applications directly from manufacturer or dealer websites without having to visit a showroom. The increasing digitization and comfort of online shopping has resulted in the growth of online platforms that enable end-to-end car purchase from the comfort of consumer’s home. These platforms provide transparent pricing, real-time inventory availability and trade-in values.

The key aspect of online car buying is that it empowers consumers to research options at their own pace and place. They can compare makes and models, trim packages and features, and even negotiate pricing without sales pressure. This level of control and transparency in the car buying process has increased consumer preference for online shopping. The global online car buying market is expected to growing rapidly owing to increasing inclination of users towards digital platforms and growing tech-savviness of millennials and Gen Z population.

Key Takeaways

Key players operating in the Online Car Buying Market Demand are American City Business Journals Inc., Asbury Automotive Group Inc., AutoNation Inc., CarGurus Inc., CarMax Inc., Cars and Bids LLC, Cars.com Inc., Cars24 Services Pvt. Ltd., CarSoup of Minnesota Inc., Carvago, Carvana Co., Cox Enterprises Inc., eBay Inc., Edmunds.com Inc., Hendrick Automotive Group, Lithia Motors Inc., MH Sub I LLC, Miami Lakes Automall, TrueCar Inc.

The growing demand for hassle-free shopping experience along with changing consumer preference towards digital platforms is fueling the growth of online car buying market. The transparent pricing, instant financing options and dedicated sales representatives assisting buyers online throughout the purchase process have increased consumer trust on online platforms.

Globally, online car buying market is also expanding significantly with major players focusing on international expansion. Countries like US, China, UK, Germany, Japan etc. are emerging as key markets. Furthermore, the integration of AR/VR technologies allowing simulated test drives is expected to boost the online car buying trend worldwide in coming years.

Market Key Trends

One of the key trends gaining traction in the online car buying market is use of AI and machine learning technologies by players. Platforms are using customer purchase patterns and preferences to provide personalized recommendations. AI chatbots are assisting consumers with their queries round the clock. Automated fraud detection systems are also strengthening security and ensuring smooth online transactions. As internet and technology continue to evolve, AI and ML based innovations will play a crucial role in digitally transforming the online car buying experience.

Porter’s Analysis

Threat of new entrants: New entrants find it difficult to enter the online car buying market as it requires huge capital investment, established supplier networks and strong brand image and credibility.

Bargaining power of buyers: Buyers have moderate bargaining power in the online car buying market. Buyers can compare prices and features of different cars online and negotiate on price.

Bargaining power of suppliers: A few big companies dominate supply of new cars limiting bargaining power of suppliers. Supply contracts are long term in nature.

Threat of new substitutes: Alternatives like used car sales online or personal vehicles have limited threat as appeal of online new car buying for features, trust and convenience remains strong.

Competitive rivalry: Market has few big players and many small players leading to intense competition on various customer touchpoints like price, promotions, loyalty programs etc.

Geographical Regions: North America currently dominates the online car buying market accounting for over 40% share driven by technological adoption and preference for online purchases among buyers. Asia Pacific is the fastest growing regional market spearheaded by countries like China and India where online shopping trends are proliferating.

Geographical Regions: United States currently accounts for the largest share of over 30% of the global online car buying market value led by states like California, Texas and Florida having higher disposable incomes and technology penetration. China market is growing at an exponential pace benefitting from increasing internet usage, developing online payment options and young population open to embrace new trends.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it