The online car buying market enables customers to purchase vehicles through online portals or dealership websites. Key features of online car buying include researching makes and models, accessing vehicle inventory listings, getting price estimates, arranging test drives, applying for financing, and completing the purchase entirely online. The convenience of researching, comparing, and buying a car from any location has boosted the popularity of online car buying in recent years. The global online car buying market is estimated to be valued at US$ 751.83 billion in 2024 and is expected to exhibit a CAGR of 12% over the forecast period of 2024 to 2031.
Key Takeaways
Key players operating in the Online Car Buying Market Demand are American City Business Journals Inc., Asbury Automotive Group Inc., AutoNation Inc., CarGurus Inc., CarMax Inc., Cars and Bids LLC, Cars.com Inc., Cars24 Services Pvt. Ltd., CarSoup of Minnesota Inc., Carvago, Carvana Co., Cox Enterprises Inc., eBay Inc., Edmunds.com Inc., Hendrick Automotive Group, Lithia Motors Inc., MH Sub I LLC, Miami Lakes Automall, TrueCar Inc. Major players are investing heavily in enhancing digital experiences for customers to boost sales.
The online car buying market presents significant opportunities for players to leverage advanced technologies like virtual reality, artificial intelligence, and machine learning to optimize the online car purchasing process. For example, virtual reality or augmented reality technologies can be used to provide immersive experiences for customers to visually inspect vehicle interiors and exteriors from anywhere.
Key players are also expanding globally to tap growth opportunities in international markets. For instance, Carvana has expanded its operations to over 300 locations across the United States and plans to enter the Canadian market as well. Cars24 also raised $450 million in June 2022 to accelerate its international expansion plans beyond existing markets of India, UAE, and Australia.
Market Drivers
Rising smartphone and internet penetration have made online research and transactions more convenient for car buyers. Growing preference for contactless shopping experiences amid the ongoing pandemic is further propelling the online car buying market. The ability to conveniently view full vehicle details, photos, test drive requests and financing options is attracting more customers to online platforms.
Market Restraints
Despite the convenience aspects, some customers still prefer the traditional way of physically visiting a dealership for vehicle inspections before purchasing. Additionally, Internet connectivity and technology issues in rural areas of developing nations could hindrer market growth to some extent. Lack of standardization across platforms and regions also poses challenges.
Segment Analysis
The online car buying market can be segmented based on vehicle type, sales channel and payment type. Based on vehicle type, the passenger cars segment dominates the market as these vehicles account for the highest sales volume globally. Consumers prefer to purchase small to medium sized vehicles online due to better deals and convenience offered for such popular vehicle categories.
In terms of sales channel, the website direct segment holds the largest share in the online car buying market. Leading dealerships and new car manufacturers have their own websites that allow consumers to browse inventory, get quotes and complete the purchase fully online. The ease of browsing endless options from the comfort of one's home and completing the transaction digitally makes the website direct segment highly lucrative.
Global Analysis
Regionally, North America holds the largest share in the online car buying market owing to high internet penetration and the early adoption of digital technologies among consumers in countries like the US and Canada. The presence of major industry players and advanced digital infrastructure in the region further support market growth.
The Asia Pacific region is poised to grow at the fastest pace during the forecast period. Countries like China, India and Japan are witnessing increased consumer acceptance of online platforms for research and purchase of new and used vehicles. Improvements in online payment options and the emergence of regional e-commerce giants are helping more buyers in Asia Pacific to experience the digital car buying process.
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