Four Tips for Competing Against Services like Carvana

The concepts of flexibility, instant gratification, and convenience have crept into every facet of our lives as consumers. We can buy anything online thanks to services like Amazon, Walmart, and other major big-box retailers.

Now, contrary to what many may have thought possible, we can now purchase cars online without ever stepping foot into a dealership. This practice is a trend that bucks up against what we have come to know about the car buying experience. One of the major players in this new arena is Carvana. The service allows consumers to purchase a used vehicle online at a fixed price. The service will then deliver it to the consumer within 48 hours. How can dealers offer a comparable level of convenience that is within their scope? Read on for four tips for competing against the likes of Carvana.

Allow Customers to Buy Online – But Have a Flexible Refund Policy

car buying

A few dealerships in Texas have partnered with Joydrive, a company that helps facilitate online car buying transactions and offers home delivery, to sell automobiles online. These dealerships have recognized that while it is true that customers are looking for more of an online experience, they also want the opportunity to try the car out before making a permanent decision. So, in place of a test drive, these dealerships allow customers to return the car in five days (as long as no more than 250 miles have been driven on the vehicle). This process enables customers to feel secure in trying out a car, and it gives dealers a more significant opportunity to show their flexibility and commitment to convenience. Partnering with a company like Joydrive prevents dealers from having to figure out this process themselves.

Responsive and Interactive VDPs

The staff at Carvana know they have to allow the customer to have as much “digital” interaction with the vehicles as possible since they cannot visit it physically. To remedy this, Carvana has 360-degree photos of the actual car. Customers can even look inside the interior to get a genuine sense of the vehicle’s condition. You can do the same and give potential car buyers a preview of what the car would be like. Also, it would help to have the Carfax accessible online to provide customers with more information to make a decision.

Have Staff Accessible for Online Questions

If you are considering a move toward selling vehicles online, then you have to ensure your staff is at the ready to help guide consumers through the process. Instead of having in-person sales staff, these professionals should also be trained on how to become “digital car consultants.” The goal would be to walk customers through the process of selecting the car that is right for them while answering any questions along the way. Carvana is for a niche market that does not have the time to walk into a dealership. However, by allowing for customers to receive online or phone car consultations, customers who want a more convenient experience can still have the best of both worlds.

Transparent Pricing

Carvana uses a fixed pricing strategy for the used vehicles on their website. Dealers like Sonic Automotive also incorporate a clear no-haggle pricing strategy. To compete with the convenience offered by these organizations, you may want to consider utilizing these same concepts for your dealership. Price haggling not only makes some customers anxious, but it also takes a lot of time for a new generation of car buyers who are used to making purchases on-the-go. This practice can also cause the F&I process to move a lot smoother. Helping customers understand why a vehicle is priced a specific way increases trust and makes it more likely they will return.

Final Thoughts

The car buying process has remained roughly unchanged for the past few decades. However, smartphones, faster internet speeds, and companies like Amazon are making on-the-go purchasing something a new generation of buyers have come to expect. While you might not be able to go online entirely, some of the other tactics mentioned above can still create a more straightforward car buying process that can create long-term customers.

Chanell Turner
Chanell Turner
Chanell Turner is a contributing writer and investigative journalist for CBT News.

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