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GM prompts dealers to sell cars online

Posting in Finance

General Motors is extending software to its full dealer network to help tech-savvy shoppers scrutinize a car before heading to a dealer's lot.

While you can buy anything online these days, and many of us prefer the quicker, more efficient method to traipsing around brick-and-mortar shops, dealers prefer face-to-face meetings. Interacting with a potential customer gives salespeople job security, and allows dealers to promote profitable service work and add-ons -- as well as finance and insurance products.

However, with rival firms including Tesla embrace technology that allows shoppers to bypass showrooms, view tests and trade-in prices, secure financing and take a car for a virtual spin, GM has decided to act.

The problem is that state franchise laws typically prevent automakers from selling directly to consumers. To circumvent the law, Tesla shows off vehicles in digital galleries -- but then directs customers to the Tesla website to find a dealer. Despite some dealer resistance, GM has announced plans to expand Shop-Click-Drive, a web application that bypasses the showroom.

The difference is that the application is connected to GM's 4,300 dealers, and when a customer orders a car through the system, they still have to visit a local representative to complete the contract.

It would be interesting to know who -- if anyone -- earns commission through the system, which is simply a digital way to close a deal before securing a new car. In addition, the scheme will test whether the web application falls foul of state legislation by cutting out the physical middleman.

Via: The Car Connection

Image credit: General Motors

— By on October 8, 2013, 6:49 PM PST

Charlie Osborne

Contributing Editor

Charlie Osborne is a freelance journalist and photographer based in London. In addition to SmartPlanet, she also writes for business technology website ZDNet and consumer technology site CNET. She holds a degree in medical anthropology from the University of Kent. Follow her on Twitter. Disclosure