Online car buying statistics 2024

General online car buying statistics

While it may seem risky to make such a large purchase sight unseen, consumers appear increasingly comfortable buying a car online. According to Allied Market Research data, by 2030, the global online car buying market is expected to reach $722.79 billion, up from its 2020 market value of $237.93 billion. McKinsey & Company also reports the following:

• Less than 3% of respondents have purchased a car online.
• A further 23% would order a vehicle online while still having some in-person contact at the dealership.
• Twenty-nine percent are interested in an entirely online car buying experience.
• A substantial 42% of respondents indicate they’d consider switching auto brands if the online experience with their current brand failed to meet expectations.

The internet has dramatically expanded the possibilities for car buyers beyond just neighborhood listings and local dealers. In fact, according to data collected by Google, 95% of car buyers source information online when engaged in the vehicle buying process.

As a result, dealers are scrambling to catch up to meet consumers on their turf (online) — and on their terms. Cox Automotive’s 2023 Digitization of Car Buying study sheds light on this emerging dynamic, noting that 39% of car dealers now enable consumers to complete every step of the purchasing process online.

Purchasing vehicles digitally is a trend that shows no signs of slowing. According to Statista, global automotive e-commerce is expected to experience an annual growth rate of 17.5% during the next decade — and reach an estimated market size north of $176 billion by the early 2030s.

Out-of-state car buying

Many buyers intentionally search for vehicles using out-of-state listings to tap into wider selections and potentially score better pricing. However, it’s wise to look before you leap across state lines to find your new ride.

For starters, it costs an average of $1,150 to ship a car 1,000 miles. Sales tax, registration rules, and emissions tests vary widely from state to state, too, and you may be required to purchase a temporary registration tag for your drive home.

It’s always in a buyer’s best interest to do their homework on out-of-state fees, rules and regulations to protect their budget. And when planning to drive a new purchase across state lines, don’t forget to account for the costs of gas, lodging and food before you make a final decision. Casting a wider net may yield what appear to be good deals on paper, but incidental fees can quickly make potential bargains evaporate.

Online car buying industry overview

In 2021, the market size of global automotive e-commerce was estimated at $38.67 billion. However, it is expected that by 2031, the market size for global automotive e-commerce will reach $176.24 billion.

The online automotive aftermarket industry also anticipates exponential growth in coming years. In 2020, the global online automotive aftermarket accounted for nearly $57 billion. That figure is forecasted for an annual compound growth rate of approximately 16% and could reach $140 billion by 2027. Online sales in the U.S., meanwhile, could account for an 18% share of all used cars sold online by 2025 (compared to just 9.7% in 2020), according to consulting firm Roland Berger.

Among the leading online used car dealers in 2021 were CarMax, Carvana and Auto1. CarMax alone reported over $31.9 billion in global revenue for the fiscal year ending on Feb. 28, 2022.

One fascinating aspect of this digital revolution is that consumers aren’t just using computers or laptops while shopping for vehicles. Mobile apps account for a surprisingly substantive portion of digital sales. A 2022 survey revealed that nearly 23% of respondents made their car purchase via mobile phone.

Consumers have demonstrated that they are willing and able to conduct major purchases online, though dealers must provide seamless, personalized and stress-free experiences to build and maintain trust. McKinsey & Company reports that 42% of consumers (who would consider buying their next car online) would switch brands if their current brand offered anything less than a quality online buying experience.

Online car buying industry growth

The global online car buying market is experiencing tremendous expansion and should continue to proliferate as options expand and improve. Several key factors are fueling this online buying boom, including the following:

• Rising internet usage, which makes remote purchases convenient
• More online car portals improve access to vehicle information
• Extended warranties on used cars, which reduce risk
• Flexible purchasing options, such as financing

There’s plenty of psychology at play, too. While the top benefit of online auto sales relates to “saving time” (for consumers and dealers alike), Cox Automotive’s data reveals that online shopping also caters to many people’s communication preferences. Twenty-six percent of car buyers still prefer to communicate in person at a dealership, but Cox Automotive data show these additional communication preferences:

• 23% phone calls
• 14% email
• 11% online chat box
• 10% text messaging
• 8% mobile app messaging

Demographic data also points toward the increase of online car buying moving forward. According to McKinsey & Company, nearly 30% of all consumers desire to make their next vehicle purchase online. Generationally, 34% of Gen Z respondents indicated a willingness to fully order their next vehicle online, without any physical dealership touchpoints (compared with just 19% of respondents ages 45 and over).

B2B online car buying growth

In 2021, business-to-business (B2B) e-commerce automotive and automotive equipment sales accounted for roughly 50% of U.S. merchant wholesale trade sales. These figures include online retail sales of vehicles, spare parts and other services related to the usage of cars.

Vehicle and auto equipment wholesale trade e-commerce sales in the U.S. 2010-2021 (in billion USD).

Pros and cons of buying cars online

There are plenty of potential benefits — and possible drawbacks — to purchasing a vehicle online. Before making a decision, consider the following variables.

Questions to ask when buying a car online

Consumers hold the cards and shouldn’t be shy about gathering information when making any purchase — especially one as substantial as a car. Before making a final purchase decision on a vehicle, consider asking the seller these essential car buying questions:

• Has this car been in an accident?
• Is the car under warranty? If so, what exactly is covered?
• Are there any additional fees?
• What will the grand total be? (Consider any shipping or delivery fees, too.)
• What’s the Kelley Blue Book value of the vehicle?
• Is there a return policy if the vehicle doesn’t meet expectations?
• Can I take the car to a mechanic before completing the purchase?
• Can I see the vehicle’s service records?
• Are any of the vehicle’s features not in working order?
• How new are the tires, and when were they last changed?
• Is there any specific guidance on common repairs and maintenance with this specific make and model?

In addition, it’s also smart to ask about features that are important to you, such as gas mileage, four-wheel drive functionality or oil change frequency.

References

1. “Online car buying market statistics.” Allied Market Research. Evaluated Feb. 28, 2024.Link Here
2. “Online sales and subscriptions will shape tomorrow’s car financing journey.” McKinsey & Company. Evaluated Feb. 26, 2024.Link Here
3. “The auto dealer’s guide to moving metal in a digital world.” Think with Google. Evaluated Feb. 26, 2024.Link Here
4. “2023 Digitization of Car Buying Study.” Cox Automotive. Evaluated Feb. 26, 2024.Link Here
5. “Online car sales worldwide - statistics & facts.” Statista. Evaluated Feb. 26, 2024.Link Here
6. “Market size of the online automotive aftermarket worldwide between 2020-2027.” Statista. Evaluated Feb. 26, 2024.Link Here
7. “Online Car Buying & Selling Market: Size, Forecast, Players & Trends.” ECDB. Evaluated Feb. 26, 2024.Link Here
8. “E-commerce sales value of motor vehicles and automotive equipment wholesale trade in the United States from 2010 to 2021.” Statista. Evaluated Feb. 26, 2024.Link Here