n Henry was a steel drivin’ man . . .
"What if you could buy a car online, the way you buy books and computers?Would it work? Are millions of people willing to bypass going to a dealership and haggling with a salesman, and complete the entire car buying process from home, save for a test drive and final delivery?We’re about to find out.
In December of 2014, AutoNation, one of the country’s largest auto retailers, launched a new process at thirty dealerships in Florida called SmartChoice Express. If successful, AutoNation’s “digital storefront” could transform the way we buy cars. Some say this system, or one like it, might even replace the traditional salesman.I say. . . don’t hold your breath.While there’s no denying the appeal of such a program, and I believe something like it is inevitable in today’s digital world, there are some huge problems with trying to reduce something as complex and as fraught with emotion as car buying down to a simple click.
The first thing that leaps out at me is that buying on line reverses the traditional order of things by placing the test drive at the very end of the buying process instead of where it belongs, at the beginning. The customer is presumed to be able to make his or her decision based solely on information available online -- without once setting foot in a dealership, or driving a single car, until terms have been agreed upon and a decision to buy has already been made.
Well, I don’t know about you, but there’s no way in the world I ‘m going to agree to buy something before I’ve seen it in person, touched it with my own hands, and driven it. To me, putting the price before the test drive is backwards. Because buying a car is unlike anything else. If you order a book from Amazon you don’t need to “test read” it first – even though Amazon usually allows you to read a sample If you buy a jacket on line and it doesn’t fit you can just send it back.
But cars aren’t like that. You can’t just “send it back” if you don’t like it. Cars need to be driven. You can read about them all you want. You can memorize specs and do research for months, but there is no substitute for sitting in a car, seeing how it fits you, and driving it.
That requires a dealership -- and a sales consultant.
Logistics. Let’s talk about one of the most mundane, but fundamental, things about buying a car.
There’s a lot to do. There’s too much involved in buying a car to handle it all on line. Too much minutiae, too much legwork, too many questions that have to be answered, too many niggling details that must be attended to, too many legal bases that have to be covered -- all of which require human assistance.Let me give you one example. Credit applications. Many of you will find this hard to believe, but the average person cannot fill out a credit application completely and accurately without assistance from a salesperson. They leave spaces blank. They forget their work number. They forget to tell us what their monthly mortgage payment is. They incorrectly list their net income (take home pay) instead of their gross, even when it’s explained to them that we need the amount they make before taxes and deductions are taken out, not their net (I would say 75% of my customers make this mistake, no matter how it’s explained to them). They forget to list previous addresses or previous jobs. They can’t remember addresses or phone numbers of references. They even forget to give us their Social Security number.
Even when a customer does a credit application online it’s never complete and missing info has to be filled in once they arrive at the dealership. Ever wonder why it takes so long to buy a car? Because the whole process can be stopped dead in its tracks if a single piece of critical information is missing from the credit application.
A computer can’t prevent that from happening, but a salesperson can, and does, every day.
Delivery: Someone has to take your new car to the gas station and fill it up. Someone has to fill out the necessary paperwork to get your car cleaned up, then drive it down to Detail so it will be cleaned and ready for you when you get out of F & I. Someone has to find the owner’s manuals and extra keys (which can be an adventure in itself) and make sure you get them. Someone has to physically remove the license plates from your trade-in, update the stickers, if there are any, and attach them to your new vehicle (sometimes in the dead of night, in a snowstorm, with a flashlight in your teeth, fighting with rusted and seized bolts). A computer can’t do any of this.And finally, doing a thorough and professional delivery. That does not mean tossing you keys and saying “Thanks! See ya later!” It means going over the operation of everything in the vehicle, from how to turn on the headlights to where the release for the gas tank is located to how to set the clock. Again, believe it or not, a lot of people are incapable of figuring these things out on their own. I‘ve seen people fumble for five minutes trying to find the locking lever under the steering wheel that releases the tilting/telescoping feature. Many times, I’ve had to take the customer’s hand and physically guide them to that lever -- or the one that lets the seat slide forward. A computer can’t do that.(Oh, and one other thing. When the customer calls a few days later and says “I left my garage door opener in my car,” or “ZZ Top Greatest Hits is in the CD player,” someone has to walk out to their trade-in and get it for them. A computer . . . well, you know what I’m going to say.)
The “No Haggle” Myth. Online systems promise to eliminate haggling, or most of it. While there’s no fixed price, the range of negotiation is severely limited. And therein lies the problem. It is supposed that people don’t like to haggle. And many people don’t. But the fact is, many people love to haggle.There are many reasons. It makes them feel good to think they “won.” It impresses their spouse. It’s an adrenalin rush. And it gives them bragging rights to tell all their neighbors how they “beat down the price.” Take that away and you take away a lot of the fun for many people.What I predict will happen with systems like these is that the customer will select their “Best Price” online (or whatever it’s called), and then, once they get to the dealership to complete paperwork or take delivery, that’s when the fangs will come out. That’s when the real negotiations begin. And for that, you need a capable salesman. So, in essence, what any on line buying process does is delay the haggling until later on in the process. It will not eliminate it.Finally -- and I think this is what will stop on line sales from reaching 100% of any dealer’s income --
High Anxiety. I’m not talking about the Mel Brooks movie. I’m talking about the amount of money involved. People often cite The Apple Store or Best Buy as examples of the model that should be followed in car sales. Here’s the problem with that. The average Apple computer is, what? $1300? The average flatscreen TV is (again I’m guessing) around $500-$1000. While that’s certainly no small chunk of change, the average-- average-- used car in America goes for around $18,000. And the average new car, according to NADA, is over $31,000. What happens when you start thinking about spending that kind of money? Your anxiety level goes through the roof.I don’t believe we will ever get to the point where a majority of people will simply click the “BUY” button on their computer and wait for that huge investment in steel, rubber, and glass to show up in their driveway.
There’s too much risk. Too many unknowns. In short, it’s just too scary. We need a person to walk us through the process, answer all our questions, assuage our fears, and convince us it’s safe to take the final leap and sign on the dotted line. That person is a salesperson. At some point, we may call him or her something else, and modify the role they play, but I do not for a moment believe we will ever completely eliminate the human interaction that goes on between human beings who are doing the buying, and human beings who doing the selling, from the buying of cars.
But who knows? I’ve been wrong before!
Article by Mark McDonald
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