Transforming F&I for Automotive eCommerce

“No one will ever buy those online.” That used to be the conventional wisdom about clothes and home furnishings, yet eCommerce sales of both apparel and furniture increased by more than 20% in 2021.¹ Consumers who used to feel strongly about seeing, touching, and trying out these items before purchase chose convenience (backed by reasonable return policies) and made the leap to online shopping.

For those who think financed vehicles are too big and complicated of an investment for eCommerce purchase, look at the residential real estate industry. Today, consumers are increasingly purchasing homes online, cross-state or even in-state, without seeing them in-person—and arranging their mortgage financing online as well.²

The reality is that consumer preferences are driving a major shift in automotive retail as well, toward eCommerce vehicle transactions. Research shows that 76% of today’s car buyers are open to buying completely online,³ although consumers still need some time to get used to purchasing vehicles that way. With 28.9 million auto loan originations projected for 2022 alone,⁴ both retailers and lenders must evolve their processes to give consumers the ability to purchase vehicles anytime, anywhere—just like the other items they buy online.

In 2021, U.S. eCommerce sales totaled $933.3 billion and are projected to grow 23.6% by 2025.⁵ Automotive retailers that miss out on eCommerce can find cautionary tales in booksellers that dismissed eReaders as gimmicky and camera manufacturers that couldn’t bring themselves to shift from film to digital.

New form retailers are realizing greater than 100% annual revenue growth⁶ as the move toward online retailing models hits its stride, with Tesla alone delivering more than 300,000 vehicles to U.S. buyers in 2021⁷ and other startups working to follow their lead. Consumers are eager for an entirely autonomous shopping experience—free of price haggling, hidden taxes and fees that throw off their affordability calculations, and long wait times.