Buying a car online: is this the end of the car dealer?

At 3pm the same day I parked my Peugeot at Richmond Hyundai in Guildford and entered the showroom. A salesman soon introduced himself. I explained I was interested in buying an i10 and that I had a car to part-exchange. He asked me what I wanted to pay for the Hyundai and what I wanted for my trade-in, “in order to establish your budget”.

I told him revealing that would put me at a disadvantage in the negotiation, adding that I just wanted his best prices, simple as. 

We decamped to my Peugeot where the salesman gave it the once-over. He indicated the kerbed alloy wheels and thought the clutch was biting late. I returned to his desk while he debated its value with his boss.

He was back a few minutes later with a figure of £2150 and a price for the i10 of £9495, leaving a cost-tochange of £7345, or £200 more than the Click To Buy offer. However, he concluded our meeting by saying that for a decision now, he could reduce the gap, and I’m sure he’d have delivered it for free, saving me £250.

Had I been a genuine buyer, I could have compared his revised deal with Click To Buy’s and negotiated from that basis (not mentioning, the online service’s delivery charge, of course).

Later, Tony Whitehorn, CEO of Hyundai UK, explained to me that it might be possible to get a better price in the showroom than on Click To Buy, but that such an outcome wasn’t ideal: “A customer mustn’t feel that they get one price on the internet and another at the dealer.”

As for the variation in the partexchange valuation made by the online system and the dealer who subsequently inspects the car, Whitehorn explained that if those figures are too far adrift, the dealer delivering the new car or processing the deal in the showroom might ask the customer to pay an additional sum to close the gap.

“An auction house calculates the valuation and we underwrite it,” said Whitehorn. “That means we’re liable for the difference between the partexchange valuation and the price the car subsequently achieves at auction when it’s sold, so it has to be right.”

Whitehorn said Click To Buy would not replace traditional dealerships: “Although it suits people who like the convenience of buying from home and who don’t want to haggle, it relies on our dealers to make it work. [A dealer has to] receive the part-exchange and confirm its value, guide the customer through their finance and then, when they’ve bought their car, look after it.”

So dealers live to fight another day, but thanks to Click To Buy’s price transparency and free valuation, car buyers have another tool with which to achieve a better new car deal online or in the showroom.

Hyundai isn't the only online player...

BMW RETAIL ONLINE

You can choose, configure and finance your new BMW online, but this system relies on dealer involvement to process and conclude the transaction. Prices published online are not discounted and to get a trade-in valuation you must speak to your nominated dealer.

ORDER ONLINE BY PEUGEOT

Allows you to choose, configure and finance your new Peugeot. It offers trade-in valuations for your old car, but you can’t pay cash. The vehicle price includes the same customer saving as Peugeot’s other advertised deals, but you can negotiate a further discount with the supplying dealer.