As the National Automobile Dealers Association prepares to meet this week in Las Vegas for its annual convention, dealers say moving online is critical for the industry to compete with digital-only vehicle marketplaces and combat the "sleazy" car salesperson trope.

The popularity of e-commerce has changed even purchases of vehicles worth tens of thousands of dollars or more, said Perry Watson IV, president of the National Association of Minority Automobile Dealers. And the possibility of more direct-to-consumer sales of new electric vehicle brands further threatens to disrupt a national auto dealer network that's been in place for decades.

Industry analysts say dealers must adapt or die. Companies such as Carvana Co., CarMax Inc. and Amazon Autos, "really revolutionized how people want to shop," said David Whiston, analyst at investment firm Morningstar Inc. "The auto industry isn't asleep about that."

Spencer Johnson, a 36-year-old Detroit resident, said "the sleazy car salesman thing maybe is a stereotype of people that sell cars. Or maybe there's a hint of truth, and not all car salesmen are like that. But I don't really trust car salesmen, as sad as that is.

"When things are omitted, or you test-drive and something's shaking a little bit, or this doesn't work, you feel like there's other things that are being hidden from you," he added. "And again, it drives the trust factor down to a point where it just becomes so hard on us, and it becomes really stressful."

Like a growing number of people, Johnson is using the internet to start his search for a used pickup. More than half of vehicle transactions now start online, according to dealer services provider Cox Automotive Inc. Autotrader reported that about half of car shoppers start their search on a marketplace and nearly a quarter visited a search engine first.

"For many decades, it was a pretty sleazy space," Whiston said. "It’s an uphill battle for dealers. But things have really changed in the past 15 to 20 years because customers are more empowered."

Shoppers now can quickly compare models, prices and trim levels without trekking to multiple car lots. And there is less opportunity for dealers to upcharge and more pressure on salespeople to sell vehicles for the lowest price, Whiston said.

All of that is good for consumers, he added: "The internet has forced dealers to be much more transparent about things."

When customers do show up at dealerships, they often already know what they want. Rhett Ricart said roughly a third of shoppers who visited Ricart Ford in Columbus, Ohio, in the past would leave with a vehicle. Ricart, a former chair of the National Automobile Dealers Association, has seen that rate double at his lot as consumers have become more educated.

Shoppers armed with information are "ready to do business sooner," said Jeff Laethem, president of Ray Laethem Buick GMC in Metro Detroit.

Missouri Automobile Dealers Association CEO Doug Smith said the COVID-19 pandemic accelerated the move to online car shopping and pushed dealers to offer home delivery of vehicles and other perks aimed at making things faster and easier for consumers.

"We’re not Carvana," Smith said. "But the Carvana model was pretty innovative and definitely got customers saying, 'Why can't my dealer do that?'"

Car buying from the couch

Carvana was not created with the sole goal of being an online marketplace, said Christina Keiser, Carvana's executive vice president of strategy: "The question was: Why don't people like buying cars? Why is it such a difficult consumer experience?"

Carvana did not conduct its own extensive consumer polling before opening because it felt universally known that many people dreaded spending half a day browsing vehicles and negotiating with salespeople, Keiser said.

"We had seen surveys that said car salespeople are among the least trusted people around, and we knew that buying a car was ranked one of the least enjoyable experience," Keiser said.

Laethem said he's seen buyers willing to pay more for vehicles on Carvana to sidestep dealership haggling, as well as for the convenience of having a vehicle delivered to their home.

"For many customers, avoiding the showroom negotiation is a relief," Laethem wrote in a November blog post. "The simple act of paying sticker price feels transparent and honest. Psychologically, it removes the fear of being out-negotiated or feeling like someone else got a better deal. Customers are willing to pay a little more for that peace of mind."

"Much like Amazon has trained us to value speed and simplicity over hunting for the absolute lowest price, Carvana’s model means buyers can complete everything online. The car shows up at their doorstep, saving them time and stress. In today’s world, that convenience is a huge part of the appeal."

Dealers that refuse to go digital, Whiston said, "they’ll go out of business eventually."

Automakers are pushing dealers toward online marketplaces, too. Ford Motor Co. launched its certified used digital marketplace — Ford Blue Advantage — in 2021. The site's listings include dealer-guaranteed selling prices to address customer demand for price transparency.

General Motors Co. created CarBravo in 2023 to appeal to the used market and compete with online dealerships such as Carvana and CarMax Inc. But GM does not use the site to sell directly to customers, a process generally barred by strict state dealer franchise laws.

Instead, participating GM dealerships can certify used models outside GM brands — as well as Chevrolet, Buick and GMC vehicles — that are then advertised on the online marketplace.

Still, adoption of CarBravo has been slow, GM has said. At least 700 dealerships and a third of the Chevrolet and GMC network had enrolled in GM's used marketplace as of last month. Roughly 100,000 sales were conducted via CarBravo last year.

'In real life'

Most buyers still want to view vehicles in person before committing to what's often the second-most-expensive purchase for households, Watson said. Dealerships, in response, are remodeling to create a homier, curated environment that's more relaxing for consumers.

"When you walk into a home," he said, "your tendency is to not be guarded versus when you walk into a place that is strictly business."

Ford's latest showroom redesign is aimed at catering to more online browsers and creating a calming mood. The cafe-style setup is designed to give consumers more control over their interactions with staff. In concept, salespeople and receptionists will not immediately begin leading customers around.

Unveiled in the United States in September 2025, the revamp will only be mandatory for newly built or bought Ford dealerships. But it is intended to acknowledge a trend toward design that signals low-pressure, customer-led vehicle purchasing.

Dealers need to make showrooms comfortable, low-pressure environments for those who prefer in-person shopping, Whiston said: "The ones that realize it's about making the experience right for the customer are the ones that will do well."

Dealers are not "putting a Starbucks in their showrooms," Missouri's Smith said. "But they’re definitely doing more than they did several years ago."

Price transparency offered by online marketplaces has also helped calm what can be heated negotiations between buyers and salespeople, dealers say.

Laethem said in-store price tags that match the online listing build trust with consumers. Ricart aims for most sales at his Ohio dealership to end within $70 of the price listed online, he said: "It’s a lot friendlier relationship than in the past."

But skepticism remains, even with more information available online. Johnson said he would rather buy directly from a previous owner than from a dealer.

"You just don't really know who to trust and (whether) what's being conveyed to you, or the information given to you, that it's the full story," Johnson said.

Johnson has similar issues with the prospect of an all-online deal: "A used car showing up on my doorstep that I haven't had the chance to vet or drive myself seems like I'm setting myself up to be taken advantage of."

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