Why buying your car digitally is becoming the smarter choice

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(Image: Getty Images)
(Image: Getty Images)

With more than 70% of South African consumers shopping online at least once a month,  according to Deloitte, the digital lifestyle has become a reality. Now that people are used to banking online and to buying electronics, groceries and takeaways on the Internet, South Africans are also becoming more open to digital options for more complex purchases such as cars. 

Traditionally, the car buying journey started with visiting dealerships to see what they had on their floor and to get their advice. Today, most people will do their research online about which models and makes are best for their needs and search print and digital classifieds for the right deals, then visit a dealer or see the car in person before making a final decision. But, increasingly, it is becoming possible to buy a car online without even leaving your home.

Digital saves you time and money

Digital car purchases offer convenience, efficiency and transparency. According to the Deloitte 2022 Global Automotive Consumer Study, 54% of surveyed South Africans said that the reason they would consider a virtual process for acquiring their next car was that it was convenient, while 14% said because it was speedy.

With a click of a button, you can search for your ideal car from an endless range of online car dealership sites and private sellers. You are able to conveniently gather information on various cars, compare prices and specifications, and pay online before picking up your dream car. The only thing that won’t be digital is the test drive.

Purchasing a car online also means that you can pick the car you want from anywhere in the country without having to leave your home. You can test drive a car in the Western Cape and find one to buy in Gauteng, an option that became attractive due to a car shortage brought on by Covid-19 supply chain disruptions.

The digitalisation of car buying also has the potential to save you money. With a digital car purchase, you no longer need to negotiate with a sales representative. You are able to compare prices of cars online yourself and see whether you’re paying a fair price for the vehicle that caught your eye.

If you finance a car purchase, the bank will require that you have comprehensive car insurance before you drive off in your new wheels. This often leads to consumers buying cover from their bank or car dealer’s preferred insurer, which may not offer them the best premium pricing. In fact, many new car owners cancel the insurance as soon as they get home because they find it too expensive, leaving them financially vulnerable if they have an accident.

Smart AI helps to cut insurance costs

But this picture is also changing fast. Today, you can seek financing and buy insurance via digital channels, making it quicker and easier to compare offers. An AI-driven digital insurance provider like Naked operates completely online to give you the best value for your insurance premiums. You do not have to spend hours on the phone haggling to get the best deal. You can get a final quote in 90 seconds and buy cover for your car on the spot without a single phone call.

Naked has built its technology and set up its business model in a way that gives its clients the lowest possible insurance premiums. This is done through the smart use of artificial intelligence (AI) to cut costs and lower fraud. Interestingly, Naked’s data shows significantly lower cancellations of insurance relative to traditional insurers, and a big factor in this is the lower premiums and convenience that stem from fully digital insurance.

Digitalisation of the car purchase journey has just started

It’s still early days for the digital car purchase journey. At the moment car websites are able to give you pictures and videos of a car on sale, but in future we could expect to see AR/VR experiences showcasing cars with immersive experiences that help you get truly comfortable with the car you’re buying.

If you’re buying a new car, you’ll be able to configure the specs and features to your liking, before finalising the order. When it comes to a used car, an online experience backed with proof of warranty or an inspection by a reputable party like the Automobile Association will offer you peace of mind when buying online.

This doesn’t mean the end of physical car dealerships. There will be cases where a consumer wants to get face-to-face expert advice, try the leg room of a certain model or even just to smell the leather. But even in these instances, the experience will eliminate the need for traditional paper admin involved in getting finance.

Over time, the portion of cars sold completely online will increase. There are already some car manufacturers who sell certain new vehicles completely online in South Africa, while WeBuyCars’s online auction service is a good example of second hand cars being traded completely digitally.

In future, we can expect online dealers, car manufacturers and marketplaces to make it simple for you to compare financing offers, vehicles and insurance deals. You’ll likely be able to get it all in one place without speaking to a call centre agent or doing any paperwork. Imagine getting your finance, insurance and your car straight from your laptop or smartphone in a process as quick and easy as hailing an Uber or ordering a pizza.

Visit Naked Insurance HERE to find out more.

This story was sponsored by Naked Financial Technology, an authorised FSP, and produced by Adspace Studio.

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