While elements of automotive retailing have moved online, this month’s launch of Driver 1 is set to disrupt the industry much further. Driver 1 offers young drivers a seamless online experience that the founders liken to buying on Amazon Prime.
In a world where 97% of car buyers carry out research online before visiting a dealership, consumers are expanding their online engagement with the car buying process. Shoppers often claim to dislike the car buying process, leading to a situation where 75% of US customers would welcome the opportunity to conduct the entire car purchase online. The launch of Driver 1 taps neatly into this mindset.
While Driver 1 targets drivers aged 24 and under, alternatives such as Cazoo, aimed at the wider population, are due for launch later this year. While the success of these platforms is not yet proven, there are elements that both car manufacturers and dealers will need to evaluate to position themselves for a more digitally-orientated future.
Driver 1 takes its cues from Amazon Prime, communicating its no-hassle, digital-first proposition by asking website visitors to “think ‘Amazon for cars’”. This is supported by the move online of all aspects of the car-buying process. As per existing dealerships’ and manufacturers’ websites, shoppers can browse cars online. But they can also apply for finance online, scanning their driving licence with their phone. Documents can be signed with an e-signature. Then the shopper’s vehicle is delivered to their doorstep. Unlike other online options, this process completely bypasses the need to visit a dealership.
Not only is the process convenient, it is also fast. Finance approval takes a few minutes, while vehicles are delivered in as little as 48 hours.
The Driver 1 service avoids added extras, building perceived value. Home delivery of the vehicle is free-of-charge. Each vehicle is sold with a package that includes breakdown cover, MOT, road tax and a warranty.
Driver 1 claims that their vehicles are more affordable “by stripping out all the unnecessary steps and margins in the supply chain and dis-intermediating the dealer”. Offering a limited number of models also creates cost savings by improving stock turnaround.
Each vehicle has a 14-day money-back guarantee, which counteracts the lack of test drive facilities. A recent survey of UK consumers by car dealer Peter Vardy suggested that 27% of buyers would be happy to buy a car online, with 18-24-year olds most likely to avoid a traditional dealership.
The Driver 1 website also communicates the reassuring aspects of each individual vehicle very clearly. Simple tick-marks highlight positive aspects such as long MOTs and low insurance groupings:
The Driver 1 business is supported by services from Cox Automotive and its subsidiary Mannheim.
Is there a risk in targeting young customers?
The opinion of many commentators in the automotive industry is that younger consumers will increasingly reject car ownership in favour of innovations such as shared vehicles. However, a new report from consultancy Duff & Phelps indicates that younger age groups remain keen on buying a car of their own. While the Duff & Phelps study used a slightly older sample of people than the Driver 1 target audience, the report does suggest that the common assumption of low enthusiasm around car ownership is not necessarily true.
According to the study, 75% of respondents aged between 23 and 38 currently own or lease a car, and 83% expect to purchase or lease a car in the next five years. While it might be expected that city dwellers had lower rates of car ownership, there was virtually no difference between urban and rural respondents in Europe. However, city dwellers in the US and Canada did have lower rates of ownership versus the general global population.
Overall, however, it seems that these new online car services are completely compatible with the digital lifestyles of a new generation of consumers.