• Buying a new vehicle online comes with its own set of regulations.
• The process may seem easy, but is anything but a simple process.
• New car buyers will most likely still be required to visit a dealership.
• For more motoring stories, go to www.Wheels24.co.za
Online shopping trends were on an upward trajectory long before the pandemic, and the enforced national lockdown saw South Africans investigating how to buy toilet paper and pool chlorine from the comfort and safety of their couches.
The rise in popularity of many existing and new online shopping platforms has, in turn, fuelled the notion that similarly buying cars will soon be a reality. Is it possible to buy a car online from start to finish and have it delivered to your driveway without ever leaving home? Yes, but it was before Covid-19 and only under exceptional circumstances.
However, there is both good and bad news for those hoping to click a web page button and see a new car magically appear a few days later.
2020 Toyota Corolla hatch (Warren Wilson)
Adopting new methods
Many local car brands are currently advertising new methods for South Africans to browse, and in some cases even buy, their next car from home. While these tools are very handy, there are limitations to how far you can travel along this convenient journey, despite clever wording which may imply otherwise.
The fact is these new services offer an elegant way for Original Equipment Manufacturers (OEMs) and dealers to cast a wider net on a bigger audience, together with convenient solutions for willing participants within that audience. But the progression of any deal will ultimately trickle down to a final transaction between buyer and seller at dealer level.
For most, a new or used car is the second-highest expense after housing costs, so committing to a large purchase such as this is a bit more complicated than ordering a new kettle from Takealot. If your kettle arrives by courier a few days after you entered your credit card details and click 'Buy' on your laptop, and you're not happy with it for whatever reason, you return it and get a refund.
Besides the fact that kettles don't come with a myriad of upholstery options, optional features, engine choices and paint finishes, they also don't often come with mandatory insurance, finance plans, FICA requirements and hefty price tags. More importantly, it's unlikely you'd be trading in your old kettle, and this process would undoubtedly require some physical interaction to facilitate - as it does with vehicle trade-ins.
How would you prefer to buy a new car under the 'new normal': online or through the dealership? Email us with your opinion.
Online car buying experience (Supplied by NADA)
It won't gel
While new digital technologies have and will continue to accelerate and streamline car buying in South Africa, there are some simple reasons why e-commerce and car sales don't gel as a realistic option in the foreseeable future.
While there's no doubt that for some a car is just an appliance, the vast majority of car shoppers would prefer the touch, feel and smell of a genuine showroom experience, or at least to inspect the goods they're committing to.
Then there are the nitty-gritty regulations which take the wind out of the sails of the pure online car buying fantasy. Technically, all transactions in South Africa, other than for property, can be concluded with a simple offer and acceptance. But online transactions are governed by the Electronic Communications and Transactions Act (ECTA), and it is here that matters such as offer and acceptance, as well as final delivery, are regulated.
The Act is designed for items that are extremely standard and understood by customers - such as a kettle. When it comes to special orders or anything where the consumer sets specifications, the goods will only be suitable for use or enjoyment by that consumer in particular. Cars often come with many specifiable options, accessories and bolt-on value add products, which would force the number of protections generally afforded to consumers by the Act to be excluded.
Imagine an outrageous paint selection combined with an unusual interior colour. It would be unreasonable to expect a dealer to accept the return of this vehicle for any reason other than that it was not supplied to requested specification. Though that is an extreme case, the same would apply to any vehicle with customer-specified fitments no matter how big or small.
(Mohssen Assanimoghaddam / Getty Images)
The issue of depreciation
Items covered by the ECTA have a universal cooling off period which cannot be waived via the contract. It allows a consumer to cancel any transaction without reason and penalty for goods or services within seven days of receipt. The only charge that can be levied is the cost of returning the goods, and payment of the refund must be made within 30 days of cancellation. This is an unrealistic situation when it comes to the value of motor vehicles and the natural depreciation they face as second-hand goods, and this protection would be excluded if a vehicle has been altered in any way through client specifications.
South African OEMs and dealerships are indeed working frantically to offer new ways of engaging customers via online portals and platforms, and NADA believes these developments will roll out thick and fast in the wake of the pandemic.
Creating deals, building transactions, and exploring finance options, vehicle specifications, accessories, and value-added products can all happen online, and these processes will become slicker and more efficient. But the bottom line is that the final stages of the deal should be facilitated through a dealership together with a Sales Executive and qualified F&I Manager.
In other regions, and the US in particular, the online car sales concept is nothing new. But despite how simple TV ads and websites make the process seem, this channel does not come without some fine print. The successes and profitability of American services such as Carvana and Vroom are also under question. They may paint an alluring picture of laptop purchases and shiny new wheels being delivered shortly afterwards, but the reality is that car dealers and showrooms are here to stay.
Mark Dommisse is the chairman of the National Automobile Dealers' Association (NADA).
Mark Dommisse (Supplied by NADA)