The online car buying market allows consumers to purchase new or used vehicles completely online. Customers can browse inventory, get quotes, arrange financing, trade-ins, and have the vehicle delivered right to their doorstep without ever having to step into a dealership. This convenience of online shopping from the comfort of one's home and getting the vehicle delivered has boosted the demand for online car buying. The Global Online Car Buying Market is estimated to be valued at US$ 751.83 Bn in 2024 and is expected to exhibit a CAGR of 12% over the forecast period 2024 to 2031.

Key Takeaways

Key players operating in the Online Car Buying Market Growth 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. Rising consumer preference for online shopping and doorstep delivery is also propelling the growth of online car buying market. Major players are investing in R&D to integrate advanced technologies such as AI, virtual reality to provide improved customer experience.

Market trends

Virtual/Augmented reality- Major players are developing virtual and augmented reality platforms to provide online car shopping experience. This allows customers to visualize and customize vehicles in a realistic 3D environment.

Personalized experience- Companies are gathering customer data to provide a highly personalized online car buying experience. Customers get tailored financing options, reminders, recommendations based on their previous searches and purchases.

Market Opportunities

Used car sales- The used car segment holds huge untapped growth potential for online car sales. Consumers are increasingly open to buying used cars online.

International expansion- Leading online car buying platforms based in the US and Europe are examining opportunities in emerging automotive markets such as Asia Pacific and Latin America. The growing middle class in these regions will spur online car sales.

Impact of COVID-19 on Online Car Buying Market Growth
The COVID-19 pandemic severely impacted the growth of the online car buying market in 2020. Due to nationwide lockdowns imposed by governments globally, car sales dropped drastically as showrooms were shut. Consumers postponed purchasing decisions fearing economic instability. This declining demand impacted manufacturers and the supply chain. However, with restrictions easing in 2021, the market has started recovering steadily due to growing preference for online shopping and contactless transactions amid the ongoing risks of virus spread.
Even during lockdowns, major players in the market ramped up their digital capabilities to provide end-to-end online shopping and delivery options. They launched virtual showrooms and test drives to engage customers online. In the post-COVID period, most buyers are still hesitant to visit physical dealerships and thus rely on online platforms more than before to research, select, finance and buy vehicles remotely. The pandemic has accelerated the ongoing digital transformation in the industry and expanded the addressable market for online vehicle sales considerably. For long-term sustainable growth, industry players need to focus on enhancing virtual and augmented reality-based experiences, provide easy financing options and integrating online and offline experiences seamlessly.

The US region accounts for the largest share of the online car buying market in terms of value currently. This is attributable to high internet penetration, availability of financing options and advanced digital platforms facilitating end-to-end online purchase journeys. Further, tech-savvy consumers in the country readily adopt online shopping for big-ticket items like vehicles. China has emerged as the fastest growing regional market and is expected to surpass the US in the coming years. This can be ascribed to rising disposable incomes, growth in number of young digitally native consumers and initiatives by the government to promote electric vehicles.

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