The automotive industry in Canada, like in many other parts of the world, is experiencing a shift as new technologies and online platforms revolutionize the way people buy cars. While some Canadians have fully embraced the convenience and ease of purchasing their vehicles online, others still prefer the traditional in-person car-buying experience. In this blog, we will compare the two types of customers, explore how technology can enhance transparency and build trust throughout the process, and discuss whether Canadians are ready for a 100% online car purchase.
The Traditional In-Person Buyer
For many Canadians, purchasing a car in person remains the most familiar and trusted method. This customer values the hands-on experience that comes with inspecting the car in real-time. They are often more comfortable with the traditional method because it allows them to feel the car, test drive it, and engage with a sales representative in person. According to a 2023 survey by J.D. Power, 65% of Canadian car buyers still prefer to visit dealerships to finalize their purchase, mainly due to the physical inspection and the immediate ability to ask questions and negotiate.
For these customers, the tactile experience—feeling the leather seats, testing the handling, or simply being present in the car—is an essential part of the buying decision. They also prefer to have a face-to-face conversation with the salesperson, as it builds a sense of personal connection and trust. Additionally, in-person buyers feel that they can better evaluate the car’s true condition and value, mitigating the uncertainty that comes with online purchases.
The Online Buyer
On the other hand, a growing segment of the Canadian population is opting for online car purchases. A recent survey from AutoTrader Canada found that 48% of Canadians are open to buying a car entirely online, and 28% have already made a purchase this way. Online buyers value convenience, time savings, and the ability to compare different models without the pressure of being physically at a dealership.
This customer is tech-savvy and often seeks a hassle-free experience. They prefer browsing car listings at their own pace, often using filters to narrow down their options based on features, price, and location. They also enjoy reading reviews from other customers and exploring virtual showrooms. For them, the car-buying process needs to be transparent, efficient, and accessible from anywhere. This segment of the market is also more likely to be influenced by competitive pricing and promotions, which they can easily research and compare online.
Leveraging Technology for Transparency and Trust
While in-person buyers may value the tactile nature of the experience, technology can enhance both in-person and online car purchasing by ensuring transparency, building trust, and creating loyalty. Technology can bridge the gap between both segments and overcome some of the traditional barriers in car buying.
1. Virtual Showrooms and Detailed Car Presentations
For customers who prefer to shop online, video calls and virtual showrooms have become an increasingly popular option. Technology allows dealerships to give virtual tours of cars and provide detailed insights through high-quality images, 360-degree views, and video presentations. A customer can ask questions, view the car from all angles, and even take a virtual test drive—all from the comfort of their home.
For example, Lane11 Motors, based in North Vancouver, offers virtual consultations with customers, showcasing cars in real-time through video calls, where potential buyers can ask specific questions and get a walk-through of the vehicle. This level of transparency ensures the customer is not left with unanswered doubts, similar to the in-person experience.
2. Breaking Distance Limitations
One of the greatest advantages of embracing technology is that it breaks down geographical barriers. Customers in remote areas, or those located far from major cities, no longer need to feel limited to local dealerships. Virtual consultations and video tours allow them to explore cars available at distant locations.
In some cases, technology even enables car dealerships to provide better customer service through apps that offer the ability to track delivery progress, schedule test drives, and handle financing—completely online. This brings a new level of efficiency to the car-buying process, making it more accessible and convenient.
3. Building Trust Through Reviews and Transparency
Online reviews and ratings are invaluable tools for customers who are hesitant about purchasing a car online. Technology allows for an abundance of social proof, and platforms like Google Reviews, Trustpilot, and AutoTrader allow prospective buyers to read reviews from previous customers.
Moreover, transparency can be maintained through detailed inspection reports, Carfax reports, and clear pricing structures. For example, many dealerships now offer a "no-haggle" pricing model online, which guarantees a fixed price for a vehicle, giving customers the peace of mind that they won’t encounter hidden fees or aggressive sales tactics.
4. After-Sales Service and Support
Building loyalty post-purchase is equally important. By embracing technology, car dealerships can provide better after-sales service, such as offering online maintenance scheduling, remote diagnostics, and customer support via chatbots or video calls. This commitment to continuous service helps dealerships foster long-term relationships with customers.
For example, after purchasing a vehicle from a dealer, customers can access a portal where they can track the vehicle’s service history, book appointments, or even schedule remote consultations with a service advisor. This further enhances the customer experience and adds value beyond the initial sale.
Are Canadians Ready for 100% Online Car Purchases?
Despite the technological advancements that have transformed the car-buying process, the answer remains mixed. While many Canadians are increasingly comfortable with the idea of purchasing cars online, especially with the added convenience and transparency technology provides, a significant portion of the population still prefers the traditional, hands-on experience.
According to a 2024 study by Deloitte, 32% of Canadians still prefer to complete the entire purchase in person, even if the initial research is done online. This indicates that while Canadians are warming up to the idea of online car purchases, there is still a strong emotional and practical connection to the in-person experience, particularly when it comes to finalizing the sale.
Conclusion: Embracing Technology for a Better Future
The car-buying landscape in Canada is evolving. As technology continues to improve, it will likely play an even more significant role in enhancing transparency, trust, and convenience for both in-person and online customers. However, while Canadians are increasingly adopting online car-buying practices, we are not yet fully ready for a 100% online car purchase model.
The future of car buying in Canada is a hybrid approach, where customers can choose their preferred level of in-person interaction while benefiting from the transparency and convenience offered by online tools. By continuing to leverage technology, car dealerships can build trust, expand their reach, and improve the overall customer experience—ushering in a better, more efficient future for the car industry.