Consumers may be purchasing many items online nowadays without batting an eye, buying a car online is something which has consumers "scared to death," says says Cox Automotive COO Mark O'Neil.
"They weren't thinking of it as 'quick and easy,' but 'handcuffs and shackles,' " said O'Neil. They feared getting locked into a deal or having $30,000 withdrawn from their bank account seconds after clicking on it, he said, citing the company's research.
So if Cox wants to help dealerships take more of the buying process online, particularly the parts consumers don't enjoy doing at the dealership, O'Neil says, Cox needs to introduce consumers to this experience gradually.
It starts with awareness.
O'Neil said Kelley Blue Book is doing this by highlighting how consumers can initiate the trade-in process online with its Instant Cash Offer program. The site launched a TV ad campaign in April that showed a consumer getting a trade-in offer from KBB.com on his phone.
After a person enters their trade-in's details on KBB.com, the site presents them with an offer that must be approved later at a dealership participating in the program. Once the vehicle's condition has been verified, KBB says, the person can keep the money or use it to buy another car.
KBB says 3 million consumers received Instant Cash Offers in 2015 through its site and Autotrader, which also uses the feature. If no dealership approves the offer, Cox purchases the vehicle for the agreed-upon price and sends it to a Manheim auction, also owned by Cox.
KBB's cash-offer program depends on people giving truthful descriptions about their trade-ins, and O'Neil said consumers are doing that, with only 3 percent providing inaccurate information.
O'Neil said the wording used to walk people through a digital purchase is critical to building comfort in the process.
Asking for a Social Security number right away can scare off a customer, he said. It makes more sense to get their name and ask if they live at the given ZIP code before seeking more information.
Letting consumers know the steps they're taking online will save them time in the store is key, O'Neil said.