As we move closer to the year 2030, the landscape of car buying is undergoing a huge transformation. Emerging technologies, changing consumer preferences, and new business models are reshaping how vehicles are bought, sold, and serviced. In this blog post, we'll explore key trends and predictions that are expected to influence the future of car buying, drawing insights from a recent podcast interview of industry expert Steve Greenfield with the CarDealershipGuy and supporting research studies.
Let's dive into what the next decade may hold for consumers and dealerships alike.
Impact of Subscription Models on Vehicle Ownership
The emergence of vehicle subscription services is disrupting the traditional concept of vehicle ownership. According to a study by McKinsey & Company, consumers may soon have the option to access a variety of vehicles on a subscription basis, paying only for features they choose to use. This shift presents an opportunity for dealerships to offer more flexible and personalized experiences to customers. However, it also introduces complexities in appraising and selling vehicles with subscribed features.
Unbundling of Vehicle Features and Consumer Choice
The concept of features on demand is gaining traction, where vehicle features themselves are becoming unbundled. Consumers can choose whether to pay upfront or on a monthly basis for features such as full self-driving, heated seats, or cold weather packages. The ability to activate or deactivate features as needed empowers consumers with greater control and flexibility over their driving experience.
The Importance of Over-The-Air (OTA) Updates
OTA updates for vehicles will also transform the way vehicles are serviced and maintained. With the ability to remotely update software, dealerships may see a reduction in warranty and recall work.
Transition to a Software-Driven Dealership Experience
Dealerships may need to adapt to a software-driven experience, with a focus on optimizing the deployment of OTA updates and ensuring compatibility with the vehicle's hardware. The role of technicians could evolve to include expertise in software and data analysis, further enhancing the service experience for customers.
Challenges of Appraising and Selling Cars with Subscribed Features
The trend of subscribed features presents unique challenges for appraising and selling used vehicles. Dealers and appraisers need to account for features that may be deactivated once ownership changes. It's essential for consumers to have confidence that all their subscriptions are canceled upon trading in the car and for dealers to know which features will remain active for the resale.
Certifying and Showcasing Subscribed Features
Dealers may need to develop methods to certify the cancellation of subscriptions, provide information on available features, and showcase these features to potential buyers. A central clearinghouse repository of all features and data around window stickers could help streamline this process.
The Role of Augmented Reality (AR) in Vehicle Servicing
The Apple Vision Pro is just a preview of what’s to come, and it could actually have a big impact on the automotive industry. AR technology has the potential to enhance the skills and efficiency of automotive technicians.
AR can provide real-time guidance during servicing, allowing technicians to visualize ideal repairs and receive step-by-step instructions. AR could also be used for training and upskilling technicians, equipping them with the knowledge needed for an evolving automotive landscape.
Investing in AR tools could enable dealerships to make their technicians more productive and efficient. Technicians equipped with AR technology can deliver higher quality service and repairs, leading to greater customer satisfaction and loyalty.
Consumer Expectations for Transparent Financing and Insurance
Consumers increasingly demand transparency in financing and insurance products offered by dealerships. Access to information and cross-shopping options on the internet have led to heightened expectations for transparency in financing rates, insurance premiums, and coverage options.
Demystifying the Back End of the Car Deal
Dealerships have an opportunity to build trust and loyalty by providing consumers with clear and detailed information on financing options and insurance products. Streamlining and demystifying the back end of the car deal can enhance the overall car buying experience and empower consumers to make informed decisions. Additionally, the use of technology to provide real-time financing options and insurance quotes can help dealerships meet the evolving expectations of consumers.
The Future of Autonomous Vehicles: Predictions and Challenges
The development and deployment of autonomous vehicles (AVs) (or self-driving cars) continues to be a hotly debated topic within the automotive industry. While some predict that Level 5 autonomy (full automation without human intervention) is within reach, others believe that technical, regulatory, and weather-related challenges may limit the widespread adoption of fully autonomous vehicles. These factors in addition to the costs of early vehicles, will make adoption around the nation difficult.
Let’s See What Happens…
The future of car buying is set to be shaped by a combination of technological advancements, evolving consumer preferences, and new business models. From subscription services to OTA updates, AR in vehicle servicing to the quest for autonomous vehicles, the automotive industry is undergoing rapid transformation. As we look towards 2030 and beyond, it'll be important for dealerships, consumers, and industry workers to adapt and embrace the opportunities and challenges that lie ahead.
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Note: This blog post includes insights from an interview with Steve Greenfield, available at: https://www.youtube.com/watch?v=oSCaP3HQWIo
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