Dealers turn to the Internet to acquire used inventory

Nearly half of automobile dealerships (48 percent)in the United States are using the Internet to purchase used vehicle inventory - a dramatic increase from a year ago, according to a new study by Q2 Brand Intelligence.

A similar study last year by Q2 found that only 12 percent of dealers were using the Internet to purchase their used vehicle inventory.

The new study also reveals that dealers' experience with the Internet is a positive one and that online purchasing will continue to grow. For instance, more than four of five (81 percent) who have purchased used vehicles online say they will do so again. In addition, nearly one in five (17 percent) who obtain used vehicles online purchase at least 21 percent of their used vehicle inventory via the Internet.

"It's apparent that there's a strong movement among dealers to use the Internet to acquire used vehicles," Q2 Brand Intelligence Vice President David Bauer said. "In business it can be difficult to recognize more effective operations methods until such methods are made available. Now that dealers are beginning to see the benefits the Internet affords in terms of cost and convenience, there's a big move in that direction."

Increased challenges to acquiring used vehicles seem to be driving dealers online. For instance, 40 percent of dealers report that simply locating quality used inventory has become a greater challenge, up from 37 percent last year. Dealers also seem to have fewer resources, as the number of dealers listing "lack of time" as an impediment jumped significantly, from 10 percent to 17 percent.

Conversely, issues surrounding used vehicle pricing dropped slightly from 27 percent to 25 percent.

"The Internet is designed to uniquely answer both the challenge of locating quality used inventory and time management and efficiency," Autodaq chief marketing officer Ellen Taverner notes. "The drop in the number of dealers reporting pricing issues as a problem reinforces this because the Internet provides another resource to compare prices and locate competitively priced used vehicles."

The study's findings are mirrored by an overall growth in Internet-related services used by the auto dealer community, according to the new survey. For example:

"The survey demonstrates that savvy dealers are learning how to integrate Internet services into their business operations," Ms.Taverner says. "Such services enable dealers to supplement traditional functions with the Internet, producing a business that runs smoother, is more efficient and more profitable."