Do car showrooms have a future?

by , Senior Cars Researcher Transport & Travel 28 January 2013
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The high street is depleting. The demise of Jessops, Blockbuster and HMV has been a focal point of news this month, but how will car showrooms cope with changing consumer buying demands and requirements?

Car showroom vintage

How we buy cars is adapting very much in the same way as other consumer goods. With so much information and flexibility available online, buyers can make informed purchase decisions without leaving the comfort of their sofa.

Not only can you read reviews of every model you could conceivably buy – including our own car reviews based on controlled lab testing – there’s also a plethora of owner reviews and verdicts to ponder. And since there are full specifications and option lists online, there’s no need to step foot into a showroom to pick up a brochure.

Car buying process – how times have changed

I can remember some 15 years ago as a youngster, traipsing around car showrooms with my father, clutching his list of company car availability for that year. We’d return home with a Rob-sized stack of brochures to ponder, gawping over different interior trims and finger-printing the glossy metallic-paint coloured squares. But all the while we did this, we’d have to piece together how the car would look in our minds.

Things are very different now. In 2013, you won’t find a mainstream carmaker’s website that doesn’t have a model configurator on it. These allow you to select every specification level and option on the car of your desire, and then present you with a rotating, multiple-angled display of exactly how the car will look. Back in 1998, when we finally opted for a ‘Rosso Red’ Alfa Romeo 156 as the next car of choice (which was subsequently horrifically unreliable), I would have spat my Fruit Pastilles out at the thought of being able to do this.

Car showrooms will always have a future

Still, this doesn’t negate our need for car showrooms. Even today, put in the position of buying a brand new car, I wouldn’t make a decision without spending a long time in a showroom, chewing off a salesperson’s ear and getting my hands on the product.

And it’s something the Which? Car team recommends you always do. We’d always advise test driving any model before buying, but there’s also so much more that you can get out of the showroom experience that the internet will never be able to reproduce.

For example, gaining a real understanding of how big a boot is, and taking an everyday item along to see how easy it is to lift in and out of the loading space. Or trying the different entertainment controls available so you can work out if more options will be more of an annoyance. Even taking the kids along is worth doing, so you can see how they find life in the back seats.

But what’s your take on the car showroom? Is it a phase in the buying process that you still partake in, or do you think you can come to a decision without having to remove your gaze from a computer screen?

23 comments

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wavechange

To me, visiting a car showroom is a job that has to be done, rather like attending a funeral. For me the worst part is trying to secure a good deal, because I am very uncomfortable about haggling. In contrast it is very interesting to test drive cars and a quick way of information that is hard to find from the manufacturer’s website or from car reviews.

I would love just to browse websites and compare prices online, but a new car is expensive and I want to have the maximum support if I run into problems, as I have done with new cars.

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Neil

Don’t know if this has come up in the discussion already, but surely the trump card for the local dealer is the ability to offer a part exchange deal? The real threat is from the cash offer “buy any car” operations but they still represent more hastle than many people want.

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Peter Fletcher

There are two types of car showroom, one for the new car sales and another for used cars. The latter will always be on our high street as the product is unique and there will continue to be a very large percentage of buyers that need to touch, feel and drive the car.

New car showrooms are quite different and something that seems to be forgotten in the buying process is that the customer is the one in fear of killing off the high street showroom without fully understanding why. when the decision is made to trot off around the various manufacturers showrooms and gather more information about your next purchase, you will probably take a test drive, speak to a salesman and collect brochures on models etc. Once you have made your choice it then all comes down to price, in most cases anyway as there are very few people that stick to their local dealer because they get a good service. The next step for most is to scale the internet to see what is on offer and it is inevitable that the price will be lower. Your high street showroom is normally run under franchise and has all the outgoings of staffing, purchasing products such as demonstrator cars and the provision of providing a nice warm welcoming building for you to walk around in. The online showroom has none of this and is often a person(s) sat in front of a computer just placing orders with the manufacturer and as such is undercutting the high street showroom. As an ex-car salesman there was nothing more annoying than a person coming into the dealership wanting a test drive of different models and spending the best part of a couple of hours of my time when I knew it was a company car purchase and likely to be purchased through a leasing company rather than ourselves. I am not sure of the percentage of company cars on the road against private ownership but you can bet that most company motors will be provided through some guy sat behind his computer just order taking.

You have three types of car salesperson,
1. A person that has knowledge and pride in what he is selling and as such always gives a good service.
2. A person that is only interested in the sale and has little care about the client and their needs.
3. A person that has little tangible knowledge about what they sell and is only an order taker.

The high street new car franchised showroom goes to great expense to provide local people with the facility to experience first hand the products they offer but if people continue to use this but take their business to the internet then sadly it will be the end of the new car showroom as we know it.
2.

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wavechange

Peter

I have some sympathy, as I did when I heard that Comet was struggling. Unfortunately, the customer is in charge of how they spend their money. In order for the showroom to survive they must provide a service that the customer perceives to be the best option. Even if all salespersons were in your top class, the savings to be made via online purchase are a big attraction. For the moment you have traditional customers like me, who have only ever bought from a showroom and have misgivings about Internet sales.

I don’t want to waste the time of a salesperson. I just want to be quoted a decent price, find out if there are any special offers, and make a couple of calls to other dealers in the region to make sure that I would not save hundreds of pounds by buying the same model from a showroom 50 miles away. Once I know what I want, then I want to drive my chosen model to provide reassurance that I am not making a big mistake. I certainly don’t want to have to repeatedly say that I don’t want paintwork protection, insurance for the wheels and a dozen more things that can amount to a lot of extra money for me and no doubt in bonus for the salesperson. By all means tell me about the options once, but also accept the first refusal. I have generally found car salespeople helpful, polite and well informed, though sometimes a little unwilling to accept that they might be wrong about something.

I don’t expect that dealerships will prosper and perhaps you were right to get out of the business.

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wavechange

Thanks for replying Peter and sorry for ignoring your point about company cars. Obviously that is a very important issue, though not one I have given any thought to.

I think the suggestion in your final paragraph is really the only way forward.

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wavechange

Oops. This was intended as a reply to Peter’s comment below. Sorry.

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Peter Fletcher

Wavechange,

I agree with your point that the customer will spend their money with whom and where they want but my point is, how long will it be until there are no new dealerships left because of the business that is being given to the person behind the computer that has done nothing apart from take an order.

I also agree that sales people should accept no the first time but most of these people are on a very small salary £6000 – £8000 and then paid commission. They are also under pressure from management to meet targets and not just with the sales of vehicles but also paint protection, finance as well as other types of extras.

The main point I was trying to make was that a company car buyer will exhaust the facilities of their local dealer and yet they have no control of where the car is purchased from. This is not their fault but when it comes to a company purchasing large amounts of fleet vehicles, they largely do so through an internet based company and as such at the cost to the local dealer. It is a hard situation to overcome as the manufacturer wants buyers to have a good experience when entering a showroom, the franchise is under pressure from the manufacturer to sell a targeted amount of vehicles, the sales staff should treat everyone the same and I hope this is the case every time but somewhere there is a person sat behind a computer with very little overheads that can undercut the dealership every time. It seems that the manufacturer wins everytime!

Getting back to the OP, maybe the future will see a manufacturer open a dealership that provides everything but a sales department, that way they can provide cars for customers to test drive and allow them to sit with staff and build a car but all sales/orders are to be done via the internet and as such the customer experience should be good for the reason that there is no pressure on anyone to achieve targets.

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Sophie Gilbert

If buying a house is the biggest purchase we ordinary folk are likely to ever make, buying a car is likely to be the next biggest, isn’t it? At least that’s the case for me, and it warrants a visit to the showroom. Two reasons: I don’t think I could make such a big purchase without seeing (touching, trying) what I’m buying, and for me face to face aftersales service is a must, just in case.

I must say I also enjoy the visits to the showroom. I love the smell of them even! And seeing a brand new car I can’t afford (eg a coupe cabriolet) next to one I’m going to buy in reality (an ordinary super mini) doesn’t make me sad but makes me dream…

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NukeThemAll

Some interesting and very lucid points by other contributors. Having recently bought a new car, my experience of car showrooms was, as expected, very mixed – but more of that another time….

For me, despite all of the Which? and What Car? and other magazine reviews, I would always insist on a lengthy test drive for my short-list. Some cars I can eliminate as soon as I sit in them (can’t get a decent driving position) or I can’t fit bike rack/buggy/wheelchair/pram/’whatever’ in the boot (you can’t always trust the brochure) or….’something else’. A good saleperson knows the product and can fill in for the bits the brochures omit or mislead on.

I always test drive the engine/transmission/trim level I’d buy – no compromises, because eg different wheel/tyre size can affect the ride, steering and road-noise enormously. A good sales person will help you get the best out of the test drive – often the first go and then let you have a longer unaccompanied if a serious contender. So for the foreseeable future the showroom will remain (I hope).

Regarding price, my local dealers generally matched reputable broker prices, so I don’t see the internet as a huge threat except to inform buyers on selling and trade-in prices that should be achievable (brokers just introduce you to a franchised dealer anyway, although the dealership may be some distance).

Some sales people were totally brilliant – professional, knowledgeable, efficient, you’d almost invite them round for dinner. Others I encountered were bonkers or hopeless (or both) and when they descended into stereotype car sharks (“I must ask my boss if he’ll let me do a deal for you”) it was as much as I could do not to laugh (but I failed in that too, sorry guys). Nice to see many more women in the car-selling business since I last bought a new car (and they were generally the best sales people). It was interesting that these best sales people can size up a customer and if he/she has some knowledge, a lot of the ‘flim-flam’ disappears – and no hard sell on the various ‘products’ that very few actually need.

Have I talked myself into liking my local dealership? Shame on me, yes……but they do seem a decent bunch. That’s got to be progress!

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Ian

I have used franchised dealers for my last three cars two of which were new.The experience I endured buying a nearly new car was so unpleasant I will never buy anything from them again.
The problem was all the add-ons they tried to sell, paint protection,alloys insurance and separately runflat tyre insurance. I politely declined all of these extras. The problem arose when a second salesman was wheeled out to sell me ‘gap’ insurance .This insurance was vital I was told to cover the fall in value I would experience as soon as took my new purchase on the highway and had the misfortune of suffering an accident resulting in my vehicle being written off.
Furthermore, they implied they had a legal obligation to sell this cover and, if I declined , I must sign a document saying that I had declined this cover. Of course I told them this was garbage and refused to sign. I was badgered by two salesmen to sign this document for at least 30 minutes spewing all sorts of nonsense to try and get my signature.
This sales pressure, after the car purchase had been completed totally ruined the buying experience .I wrote to the dealership head to complain under recorded delivery but he did not even have the courtesy to reply.Next time I buy I will use the dealership to try and the Internet to buy.
Every time I visit the dealer’s showroom I see cost,cost cost.People walking the acres of floorspace with bits of paper in hand, they must walk miles each week. Phoning them is equally labour intensive, I have to talk to three people before I reach the coal-face and the technician who can talk expertly about technical issues.
Car showrooms will be gone in a decade,they are what remains of a time when dealers had no competition and fat margins,now they have real competition and skinny margins.

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Peter Fletcher

Ian,

I agree with everything you have said regarding the pressure of selling add-ons but I must defend the action taken when it came to signing the GAP Insurance offer. This regulation was enforced upon the motor trade by the Financial Services Authority (FSA) in 2005 (If my memory is correct) and it was monitored to the full. A network of dealerships in the north of England actually was forced to close because of a pending £2million fine for not adhering to the regulations. The FSA can pounce on a dealership at anytime and demand to see the signed documents which must be filed for a period of 6 years.

Although I am not a fan of naming and shaming it might be an idea for us to name the brands where we have received good or bad experiences? It might just shock us all as the pattern emerges as to who is tops!

I have personally been seriously thinking of mystery shopping some of the smaller showrooms and making a video of my experience, a bad one would result in myself delivering a copy on a cd to the owner along with an offer of some low cost staff training. Too many sales staff tend to think that once a customer drives their new car away then that is the end of the sale when in truth it is just the beginning. I love the motor trade with a passion and would love to re-enter with the mind to educate some of the sales staff into simply being human. My one rule was simple, do what you say you are going to do! The motor trade needs to shape up and rid itself of the hard sell tactics, it makes a much nicer environment when everyone is comfortable in their surroundings.

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wavechange

Peter

GAP insurance is the only option I did take. It’s a good job that I refused twice because I was eventually offered a much cheaper price and the salesperson bleated that they would be making no money on the sale. I’m not so sure because I checked to see if I had a genuine bargain and came up with a very similar price without difficulty.

Best of luck if you do go ahead with your venture. It’s good to hear about people taking action to protect the consumer. I don’t know if there are legal issues regarding secret filming done by members of the general public.

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Vynor Hill

One franchise showroom was good at selling the approved used car which I bought, but then the bills started rolling in and it was expected that I smile and pay with a good grace. Eventually I felt that they were laughing behind their polite facade, and the thought of further expense made me decide to change. I road tested a car that had amazing reviews in all the magazines – including Which -and found quite a few shortcomings. On to the V.A.G. dealer. I wandered round the showroom for ten minutes, but they were so busy talking to each other that I left them to it. My next showroom encounter was a revelation. No pressure, just expertise, enthusiasm for the cars and a willingness to listen to my thoughts and choices. When the deal was done, they tracked the car as it was manufactured and gave me updates about its progress until delivery day. After sales have been excellent, the car has been faultless and twenty five thousand miles on I can’t think of another car I’d rather have or an other dealer I would want to go to. I wouldn’t buy a car without a test drive and when a dealership shows care and consideration for their customers then they are worth supporting. Of course I’m lucky to be able to own my first new car. previously it was the second hand dealer and the one man repair outfit when something broke. Before that it was overalls, spanners, a Haines manual and spares from the “scrappy”. Happy days!!

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NukeThemAll

To be fair, in every single dealership we visited, we were greeted immediately and told if a sales person was free and if not when we’d be seen. And usually offered drinks and comfy seats. But our strategy generally was to phone and confirm that they had at least one model of interest in the showroom. If it passed the ‘bum on seat’ test only then would we talk more seriously to someone.

Our local dealers must all be on Happy Pills – test drives nearly always offered, only 1 dealership point-blank refused to try and source the correct engine/transmission and said (quite up-front) “it’s too much effort”. “How do you expect me to buy the car if I can’t test-drive it?” “Dunno” he says, and literally wanders off to talk footie with his pals (dealership has since been taken over so perhaps that was why, to be fair to the guy). But honestly, they were the exception – we really felt like the car selling process had taken a massive turn for the better. Taking the occasional morning/afternoon off work and avoiding busy weekend also seemed to be a great strategy. Treating the sales people like equals also helps – anyone would surely pick up the vibes and resent customers who treat them like menial serfs: not a great start to a possible long-term working relationship is it? One lady even offered to let us drive the car in the showroom, even when it involved some serious car shuffling (and we’re not talking about some £50K limo). All of the dealers respected us for having done our homework on broker prices and readily admitted they’d get close or “die trying” or offer some other incentive: only one just offered us the list price and refused to budge (on a car readily discounted). And on used cars, dealers said they could get a car from the same source as a car supermarket (daily rental fleets) and closely match prices.

When we bought a used car about 5 years ago, boy did we get the hard sell on every ‘add-on’ known to mankind. I just smiled and nodded and said nothing until they gave up. But a less-experienced buyer might be hugely intimidated – no wonder the car sales business gets such a bad press. But in the same dealership this time round (with all different staff I noted – the industry evidently has a massive turn-over) things were totally different. Indeed the best dealerships all seem to have good staff retention (lesson there somewhere?)

Recently I accompanied a female relative who wanted to buy a used car. She was treated, generally, with great respect (even if they didn’t know I was with her) and received fantastic service, with sales people giving her good advice on models to go for, ones to avoid (“crashy ride and thirsty”, “best one for retained value”) and since I know a fair bit about cars, it was all good geuine stuff. One dealership was a huge exception – I had some print-outs from a car supermarket with me, which the guy spotted, and we were practically ordered out of the place for, I dunno, “gross insubordination”. How we laughed!

So, at the moment, I remain a supporter of (nearly all) my local franchised dealers and won’t be consigning them to Room 101 just yet.

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Peter Fletcher

A quality post that for once shows a greatly positive side to the motor trade.

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Malcolm R

Like many products, some of us use showrooms or shops to see what we are thinking of buying – whether cars or washing machines – and then look for the best price, whether online or other outlets. Unfair? I don’t think so – everyone has to look after their finances and we are often willing to give a local supplier some premium for the ease of service before and after sales. And as has been said elsewhere, those who thrive often have both a shop and an internet presence to remain competitive.
For cars in particular, do we need the expensively built and equipped and overstaffed showrooms? I’d be quite happy with a modest out of town building where I could look at the offerings – which I would need to. If allied to a service and repair workshop, and second hand vehicles, then surely more competitive prices could result. The argument that “we have high overheads to recover” really doesn’t hold much water these days when we are all more aware of getting value for money.

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wavechange

I quite agree about the opulent and overstaffed showrooms. We know how pays for them.

Those who have no shortage of cash may be happier to have an opulent showroom, as befits their choice of superior vehicle, but they can jolly well pay for the privilege.

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NukeThemAll

Malcolm, if I want to look at a car, I wish to do so in the warm and dry where I can have a good examination. My local dealerships generally have showrooms which are pretty much full of cars, with some very creative packing. Yes, the showrooms are ‘nice’ but I wouldn’t call them ‘opulent’ or ‘extravagant’, in contrast they seem to be ‘fit for purpose’ buildings, lots of glass to let light in and of cours big slidy doors to get cars in and out.

They’re located at the edge of towns, often very conveniently in some ‘car sales park’ making it easy to do the make-to-make comparisons (“what did that Focus seat feel like? I’ll just nip back and check….”) And I haven’t yet encountered ‘over-staffed’ premises – everyone was clearly busy selling cars or dealing with the repair/service customers or selling parts or doing the accounts….you get the picture. No Dealer Principal is going to overstaff knowingly! That’s £££ out of his/her pocket!

Yes it might be different in the type of showroom if I were to buy a £100K vehicle. But I won’t ever know! (Although I did once take my son in a very, very, upmarket dealership when he needed some info for a school project. The people quite literally could not have been nicer)

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Malcolm R

Nuke, I’m sure not all dealers are in opulent premises, and those you refer to no doubt have lower overheads and should be more competitive. But in the past I have been involved in part of the design of showrooms where opulence was the word, something the customers end up paying for. In my area there are swanky showrooms in town where costs I suspect are significantly higher. I expect in these times natural selection will play its part.

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John Ward

Wouldn’t it be nice if car buying was like the image at the top of this article where a nice middle-aged man in a smart suit sold you a nice Ford Prefect, and offered his compliments to the Good Lady Wife for co-operatively choosing a black one [I think fawn and pale blue were also available a little later to complement the white-wall tyres then in vogue].

I think we should aslo spare a thought for the car sales staff who have to go round every morning raising the tailgates on all the cars on the forecourt and then closing them at the end of the day. What will they do if the showrooms close?

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Ian Hazell

I think that part of the problem is that the dealerships are far too large. I deal with a main Fiat dealer who has been a dealer for Fiat for 35+ years and has not changed its premisses much over the years! They always have a good selection of used Fiats and have new Fiats to order. Service is excellent as they have a properly equipped engineering workshop to look after the cars. However I suspect they sell less than a few dozen new cars a year.
We need more local family run dealerships such as this who are not driven by sales targets and who can offer a good local service.
The way to achieve this might be for the manufacturers to start from the premiss that there is a need for good local manufacturer supported service centres for the marque first, with the sales function being an optional add on for the service centre. This could be backed up by a few (say 6-10 to cover the UK ) manufacturer funded exhibition centres where a representative selection of models could be viewed, driven and perhaps hired for longer evaluations.
We need to get back to the situation where cars can be serviced more locally and quickly to encourage longer term ownership such as we see on the mainland of Europe.

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Bob Brown

Car Dealerships are almost universally a rip-off either in Deal price or in Trade-in offer. I find my BEST purchase price WHEREVER and always sell privately.
12 years ago I personally imported a BMW Coupe and sold previous one privately for DOUBLE trade-in. With then continental prices, favourable exchange rate, and that private sale I saved £12,500 on a £32,400 car and that included our weeks holiday trip to Franfurt to collect and 1000mile drive home through the Channel Tunnel. Current second car swop with Online purchase at £5.640 discount and £3,800 private sale compared with local Dealers derisory offer of £1,200 off and £2000 trade-in! There is NO CONTEST. We need Large Manufacturers showrooms to view the product and test and then make purchase online at BEST PRICE. Current Dealerships can simply concentrate on SERVING and DOING IT PROPERLY.

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matt

you have to look to the future. People born into the accelerating digital revolution 5 years ago will be coming to market in 10-15 years. These children already are displaying an incredibly fast learning curve when it comes to touch and scroll functions. Teenagers now live through their phones shopping for clothes, music, films or anything then can get the virtual hands on. Even at the tender age of 26 i grew up just before this all really kicked off and I do not see the need for a typical out of town, low footfall bricks and mortar style dealership. Brand stores are the way forward for now. Coupled with more advanced technology like AI. For example being able to take a virtual tour of a car using software on an ipad nullifies the need to have a parking lot full of vehicles. If you want a test drive it gets delivered to you. We have all information at our fingertips and don’t need to be patronise by a salesman in a soggy suit when we enter. People will say a fully online method of purchasing a car will never work. At the moment I would agree with them. The cost of the product is just too high at the moment. Although saying that, people already spend thousands of pounds online on holidays and jewellery etc. Essentially what i am trying to say is that the automotive industry has to change and follow suit with the retail industry in general or be prepared to fail when the new generation is ready to buy

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