More and more people are buying cars online. Making the right decision on what to buy, when and how to buy it is one of the things keeping South Africans up at night.
“We’ve noticed South Africans searching for car-related information during the early hours of the morning, implying that this is an important purchase decision [that’s causing sleepless nights],” said Maphale Moloi, industry lead of automotive, telecommunications, media and entertainment at Google SA.
Moloi said the search term “is it a good time to buy a car” grew more than nine times between January and February 2020, and between March and April 2020.
More and more people are deciding on what car they will be getting using the internet, and more recently people are doing most of the process of buying a car online. Moloi said the window for selling a car through a showroom was closing.
“Before lockdown, consumers visited on average 2.2 showrooms and they did 1.4 test drives before buying a vehicle, yet 93% of vehicle purchases were influenced online and 56% of buyers said they would buy their next car online,” he said.
According to Moloi, people are no longer interested in visiting the dealership.
“People want the dealer experience from their phones,” he said.
Buyers are now choosing at-home test drives, watching review videos online, visiting a digital showroom, fiddling with an online configurator, and doing virtual reality test drives.
Car dealers are taking advantage of this move to online, with AutoTrader, one the leading automotive marketplaces in South Africa, being one of them.
“AutoTrader recorded an increase of more than 3 500 (10.8%) used cars sold and R900 million (9.7%) across January 2020, the first month of its adjusted advertising schedule that included YouTube. This growth has continued during Covid-19,” Moloi said.
With more people looking to buy new cars, some are seeing this as an opportunity to scam people out of their hard-earned money.
Some of these scam artists are going to great lengths to do this.
“Early on during the national lockdown, even AutoTrader was faced with criminals trying to scam consumers by using brand assets on social platforms and with counterfeit websites,” George Mienie from AutoTrader SA said.
Mienie said the best thing consumers can do to avoid being scammed is research.
“When buying anything online, the most important thing a consumer can do to protect themselves is research, regardless of the size of the purchase,” he said.
- Get a good understanding of the prices and accompanying
specs of a car that you’re looking to buy. If the deal falls outside of this parameter, it should raise an alarm bell.
- If it’s too good to be true, it is!
- Take, for example, the most sold used car in the market – the Ford Ranger. On average, a 2016 Ford Ranger sells for R306 000, with 80 000km on mileage;
- If you find a Ranger with lower mileage and a cheaper price, it’s highly unlikely that this very popular car would be sold at that price, and so it should raise a flag.
To get this kind of information is free and easy.
“Simply pop on to a site like AutoTrader, put in the make/model you’re interested in, and order the listing by price. When you run your eye over what’s available, you’ll get a good sense for what price dealers are listing these cars for,” he added.
The global pandemic and the current economic climate have more people looking at buying second-hand.
Mienie thinks that visiting a dealership is something that’ll still be part of the car buying experience, especially a second-hand car.
“A car is arguably the second biggest purchase a consumer will make in their lifetimes. As a result, and in the current landscape particularly for used cars, visiting a car dealer for transaction fulfilment is one element that is unlikely to disappear in the near future,” he said.
He agreed with Moloi, saying that more people were looking to complete most of their transactions online.
Mienie believes that the dealer showroom is not the place to complete a deal.
“Automotive digital retailing seeks to create a seamless experience between the online and offline showroom, relegating the dealer showroom to what it should be – a place to touch and feel the product,” he said.
Seeing the rise in online car buying scams, Nedbank vehicle finance division MFC and online classified website Gumtree have come up with a solution which they say will offer consumers additional protection when buying or selling vehicles on the platform.
“This offering is aimed at individuals interested in buying or selling privately owned vehicles instead of using more traditional channels such as motor dealerships, and addresses the concerns people have when going this route,” said Douw Leadley, head of sales at MFC.
“Through a unique digital process, users can have their vehicles verified by MFC and attach a ‘Verified by MFC’ badge on the advert” Leadley added.
To get verified by MFC, sellers must input specified information on Gumtree, which then sends the information to MFC to conduct the following checks:
- Police checks to indicate if a vehicle has not been stolen or wanted.
- Accident checks to assist in verifying if the car has been in an accident.
- Finance checks to show that the car is under finance and that the finance is in good standing.
“Once the vehicle has passed all these checks, the badge is added to the advert, giving potential buyers assurance that both the vehicle and seller are legitimate,” Leadley said.