Are Dealers Afraid of General Motors’ New Online Initiative?
General Motors (NYSE:GM) is looking to give customers the option to purchase a new car online, which can eliminate the need for new car buyers to go to a dealership at all. GM’s online app called “Shop, Click, Drive” will be extended to its entire dealer network by the end of the year, according to a report from the Wall Street Journal.
The “Shop, Click, Drive” app can allow customers to lock in the price of a new car, estimate the value of a trade-in, apply for financing, and even schedule either a test-drive at a dealership or arrange to have the car delivered to a home or place of employment. The move has GM balancing the fine line between giving customers who may be used to making the majority of purchases online the ease that the Web provides and adhering to laws that give dealerships the right to sell new automobiles.
GM believes that an offering an online shopping experience is crucial in a world where buyers are becoming accustomed to making big purchases online. But, dealers have been hesitant to make such a move, as the in-store experience gives them more room to convince buyers to purchase add-ons like insurance products or financing in addition to the new cars.