Auto dealers are racing to transform their businesses with digital tools designed to drive efficiency and increase customer satisfaction. Digital transformation is taking place across the customer life cycle—from point of sale to financing and insurance to service and repair—as customers express their preference for ease, convenience, and fingertip optionality.

Key takeaways

  • Historically, U.S. car dealers generally were hesitant to transition to e-commerce. But the COVID-19 pandemic caused dealers to accelerate their focus on digitization as customers became more reluctant to shop in person. Buyer satisfaction has increased meaningfully amid the digitization of the auto dealer model.
  • Digital tools are transforming the way people buy cars. The percentage of new car sales completed online vs. in person has increased substantially since the start of the pandemic, and surveys show that most consumers are open to a completely online car-buying process.
  • Service and repair (S&R), the top profit center for auto dealers, is a growing area of focus due to the rising age of vehicles on the road and the increasing costs of repair and maintenance. Dealers are seeking ways to digitize the S&R process to enhance the customer experience and boost retention.
  • Instead of viewing financing and insurance (F&I) as the final and tedious paperwork step in the sale process, dealers are increasingly addressing it early and leveraging new digital tools to improve the process. Dealers that have moved online report favorable outcomes, helped by adaptations like simplifying the process and layering in human support by chat and video.