A franchise dealership for Mercedes-BenzImage source, Vertu Motors
Image caption, Do you still go to a dealership to buy a car, or do you purchase online and get it delivered to your home?

Why do so many of us think we can get a better deal on a new car?

It's not like they do it for a living or have decades of experience.

Things are changing at the gas station. Car dealers in the UK are facing a number of threats.

The car industry is changing rapidly due to the coronaviruses epidemic.

Customers are trying something new instead of visiting one of the thousands of car showrooms in the UK and buying a car.

People are more likely to use the internet to find a car they want than they used to be. They might try to get a discount on the price advertised online if they go to the showroom to make their final choice.

VW cars onlineImage source, VW
Image caption, The car industry has embraced the internet, but most of us still currently also visit a physical showroom

The professor of strategy at the business school thinks that the swine flu accelerated the situation. It's easy to get into the online world for customers.

You find your car on the website of the big car company, but you still get it delivered through some local sales point, and you can meet someone when you get the car.

Sue Robinson is the Chief Executive of the National Franchised Dealers Association. People still like to go to the showroom, and on average make 3.1 trips there before buying a new car, according to her.

There are fewer visits to showrooms before buying a car. The people shop around online far more than the sales staff.

The hybrid model of buying where you first look online and then go to a showroom is gaining popularity. I bought my new car the same way.

We researched what type of car we wanted, picked out the perfect model, and then searched online for a second-hand example that we could afford. We visited a showroom, went for a test drive and decided to take the vehicle home.

A Vertu Motors owned car dealership in GlasgowImage source, Vertu Motors
Image caption, Car dealerships in the UK are currently mostly independently owned franchises

10% of UK sales are said to be completed completely online with the buyer not seeing the car until it is delivered to his or her doorstep.

The new buying method is here to stay because these sales are lost to the showroom owners.

The move toward electric vehicles is also happening. Purely electric and plug-in hybrid cars make up 20% of all new cars, and will only increase in the future.

The UK will ban the sale of petrol and diesel cars by the year 2030. Money will have to be spent on retraining staff to repair and maintain electric and hybrid vehicles.

Electric vehicles have less moving parts, so they need less servicing.

The traditional car dealership may be threatened by this. The relationship with the dealership might become less important if servicing is less of an issue.

There might be more of a separation between the two. We buy a car and then go to the same place to have it fixed. In the future, that may separate.

Robert Forrester doesn't agree with that argument. He is the CEO of Vertu, a company that sells cars for BMW, Nissan, Ford and many other brands. The new car market in the UK has 4% of it's total population employed by it.

Robert ForresterImage source, Vertu Motors
Image caption, Robert Forrester is confident that dealerships are here to stay

He points out that the cars of today can't be serviced at home. The franchise dealer will be the only one who can fix cars in the future.

The move towards servicing electric vehicles will be a game-changing event. Dealers who don't invest in the latest technology will lose out.

The independent dealerships are being pressured by the car manufacturers to open their own showrooms and not use the franchise model.

The direct-selling model has been adopted by the company from the very beginning.

A Tesla showroomImage source, Getty Images
Image caption, Tesla has always directly owned its showrooms

The direct owned showrooms of two other car brands are now open. VW, AUDI and Mercedes are thought to be thinking about following in the footsteps of the others.

Car firms want some of the profit that franchise owners have made on every car they sell to be returned.

Some cars are a long way from owning their own dealerships and others are waiting to see if it works.

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Although taking over the dealerships means taking on the costs of property, staff and promotion, the carmakers get to sell their product at a set price of their choosing.

If you have your hands on the sales, you'll get a better sense of what customers are doing.

Data will become more important in the future as the way people own cars changes.

In the future, cars may be seen as mobility solutions, something to hire for a short time, rather than something to buy. You could swap your city runaround for a bigger car during the holidays or take out a convertible for the weekend.

Paying by the hour or mile is a possible option. If the car companies have your data and can use it to fashion a deal that works for you, it will be a lot simpler.

Robert Forrester is not concerned. The car manufacturers will still need sales people, but they will be paid a flat rate instead of trying to make a profit on every car sale.

The invoice will come from the manufacturer, not the retailer, he said.

It could mean less competition between showrooms selling the same brands and models. It might not be an option for a while.

  • Car Technology
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  • Car industry