Blog post

May 25, 2023

3 most common car dealership challenges to consider

Are you familiar with the “add to cart” model of buying a car that saves time and effort instead of the long and involved process in person? Nowadays customers are expecting more from their car dealership interaction experience than ever before.

Changing customer expectations

There is a demand for a more seamless, convenient, transparent, and personalized experience when buying or servicing a car. Clients look for more options for online and in-person interactions, as well as more flexibility and control over their car-buying journey. Some of the factors that influence customer satisfaction and loyalty include:

  • The quality and speed of communication and support from the dealership
  • The availability and relevance of online information and tools
  • The ease and efficiency of paperwork and financing processes


Some of the digital enhancements to expect to see with your local dealers might include:


  • Financing and pre-approval online (50% of dealers think this is important)
  • Start to finish, click-to-buy feature (43% of dealers will focus on this)
  • Trade-in valuation online (33% of dealers plan to work on this)

Increased competition

Car dealerships are expected to experience a decline in sales of newer automobiles due to rising interest rates, tariffs, and market diversity concerns. The operational challenges of high turnover rates and consolidation pressures among dealerships have led to a decline in dealership profits and a shift in consumer behavior and expectations. Therefore, it is crucial for dealers to develop a unique selling proposition (USP) that differentiates them from their competitors and creates value for their customers.

A USP is a statement that summarizes the benefits and advantages of a product or service that makes it stand out from the rest. It should answer the question: why should customers buy from you instead of someone else? Some examples of USPs for car dealerships that DealerBox’s innovative technologies can achieve are:


  • Streamline their operations and reduce costs by using digital tools and platforms for inventory management, CRM, marketing, sales, F&I, and service.
  • Enhance their customer experience and engagement by offering online tools and features such as a virtual showroom, chatbot, video call, online booking, digital paperwork, home delivery, etc.
  • Increase their reach and visibility by using online channels and platforms such as social media, websites, blogs, podcasts, etc. to showcase their USP and generate leads.
  • Analyze their performance and customer feedback by using data analytics and AI to identify areas of improvement and opportunities for growth.

Supply Chain Delays and Shortages

Supply chain delays and shortages are some of the major challenges that car dealerships face nowadays. Most of them are due to unforeseen circumstances that have a huge negative impact. Dealerships still suffer from the global computer chip shortage, which affects the manufacturing of vehicles that rely on electronic components and systems.

These factors have led to a decline in the supply and availability of new and used vehicles, as well as parts and equipment for repairs and maintenance. Although not everything can be forecasted by car dealers, proper traceability and predictability could decrease the lack of inventory. Technology can help you cope with these challenges by enabling you to:


  • Improve inventory management and quantity forecasting by using data analytics to optimize ordering, stocking, pricing, and selling strategies.
  • Collaborate with suppliers and distributors by using digital platforms and networks to share information, coordinate activities, and solve problems.
  • Automatically identify owners of in-demand vehicles and prioritize contacting prospects with highly profitable trade-ins.

If you are a car dealership owner or manager, you need to be aware of these challenges and take steps to address them. By partnering with a comprehensive solution like DealerBox, you can tackle all of these challenges and drive your business to the future.

Do not let the changing landscape of car sales leave you behind. Contact us today to see how we can help you keep up with the times.

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