The process of buying second hand cars has evolved dramatically in the last eight months, with repeated changes to lockdown restrictions fuelling a surge in fully digital or digitally assisted purchases. It isn’t just the shiny new cars rented on monthly leasing payments that are proving perfect for armchair buyers – they’re loving the nearly new stuff as well.
According to research conducted by temporary car insurance specialist Tempcover, fully digital second hand car purchases have increased 15-fold among those surveyed.
Before lockdown, half of those surveyed (50%) bought second hand cars in person, 45% had a digitally assisted purchase (combination of online tools and an in-person viewing of the car), and just 4% had a fully digital purchase journey, only physically seeing their car after it had been bought.
Since the start of the pandemic, one in six (17%) of those surveyed had purchased a second hand vehicle. Almost two-thirds (64%) of those who made the purchase opted for the fully-digital experience, while digitally assisted purchases came in at 20% and physical transactions at 15% – no surprise given the ongoing stringent social distancing measures.
When asked if a fully digital purchase journey would benefit the consumer, 57% of those surveyed were in favour. On average, drivers aged 31 to 40 are most in favour of fully digital transactions, with 64% saying it will benefit the consumer, whereas drivers aged 61+ are least in favour (44%) and prefer the more traditional approach.
Although used car sales are down on last year’s figures, and with 4 in 10 (42%) survey participants not looking to change their car any time soon, the rise of the digital dealership in the UK is clearly evident with a growing number of players in the market. Cazoo was the first fully-digital platform to enter the market in late-2019.
Since lockdown, there has been significant investment in new market entrants such as Cinch and Carwow. What’s more traditional dealerships such as Arnold Clark, Cargiant and Motorpoint have adapted to the shift in consumer trends and now offer an entirely digital purchase journey as part of their offering.
Arnold Clark finance director Jim Graham notes that since the March lockdown, car retailers have had to quickly adapt to survive. “The automotive industry has changed dramatically in 2020. Even just a year ago, the opportunities to buy a car online were virtually non-existent. Despite the challenges the industry is facing, it’s important to keep customers safe and also offer them a seamless digital buying experience with a choice of handover options including contactless Click & Collect and free home delivery.”
Car insurance is also undergoing a digital shift, with some digital vehicle sales including temporary insurance policies as part of the purchase journey, thereby eliminating the burden of investing additional time and money to find short-term cover or committing to annual cover on the spot. However, this is clearly still a nascent offering, with just 6% of those surveyed stating that a temporary policy was included in the vehicle sale.
When it comes to arranging insurance for their recently-purchased vehicle, there is an equal balance between telephone and online as the preferred method (48% each). Nearly a third of those (28%) said they wait up to ten minutes for their policy to be confirmed, and a further 22% wait as long as 20 minutes to get cover. According to Tempcover CEO Alan Inskip, temporary insurance could be more time and cost effective in this situation too.
He said: “With a temporary insurance policy, drivers can obtain fully-comprehensive cover in 90 seconds through an entirely digital process, which fits in line with the evolving consumer purchase trends. This takes the stress out of searching for annual insurance on the spot and provides the driver with near instant cover so that they can immediately drive their new car while giving them the opportunity to thoroughly research the best annual policy to suit their needs. An added benefit is there’s no risk to any existing No Claims Discount, as it’s a separate and standalone policy.”
To get a quote in 90 seconds on any car, van or motorbike, visit: https://www.tempcover.com/