Preparing for the 'augmented reality' future of car sales

using a live image or photograph as the backdrop for a virtual image on a smartphone, tablet or website, and providing customers with a virtual composite of what a particular product might look like in the real world.

Examples range from superimposing a particular style of spectacles on to a photograph of the wearer, to dropping a virtual sofa or kitchen cupboards into an image of the real room, and this technology is also finding applications online and in showrooms within the automotive sales industry.

CDK Global, a provider of AR solutions and other digital technologies for motor traders, predict that nearly three quarters of retailers will be using AR by 2021 either online, in dealerships, or both.

An even greater percentage - 83% of leading car dealerships surveyed by the firm - expect that by that time, showrooms will tend to have consolidated into fewer, larger locations, offering cost efficiencies while relying more on technology to demonstrate vehicles to customers remotely or in person.

Specific examples of how AR might be used include the ability to display different models or specifications from within a larger range of vehicles, without needing a physical example of each vehicle to be kept on-site.

This of course raises questions about how the on-site value of car dealerships might be affected, with implications for policy limits on dealership and showroom insurance cover too.

On the one hand, an increase in expensive technology and IT equipment could add to the value of business assets to be insured, independent of the value of the actual vehicles on the site.

A trend towards larger dealerships should also increase the value of individual policies, although this will be offset if the predicted decrease in total number of locations also occurs, leading to cost efficiencies for multi-site dealerships.

Finally, if fewer physical vehicles are stored on site for display and demonstration purposes, with more reliance on virtual AR versions of specific models in each range, this may also lead to a reduction in the total value that needs to be insured.

Whatever happens though, it is essential for dealerships to keep a close eye on the policy limits in their showroom insurance cover throughout the remainder of this decade and into the 2020s, at a time when modern technology is transforming the way many motor traders do business.