| In my years when I worked the sales departments at | | | | can still buy their cars online - it just takes a lot more |
| various car dealerships, one word always crept into | | | | work. |
| conversations between sales managers and | | | | First, they must find a dealership willing to deal with |
| salespeople. "Control." Control your customers. Control | | | | them in this manner. They may have to send inquiries |
| the car deal. Control the situation. Control everything. | | | | to dozens of dealerships before they find one that |
| In the automotive industry's glory days of 1975-1997 | | | | doesn't ask "When can you come in?" during every |
| (before the internet came and ruined everything for | | | | email and phone conversation. |
| them), two major things were developed and | | | | Once an e-friendly dealership is identified, it is best to |
| maintained. | | | | cut to the chase. Find the vehicle you want and make |
| 1) Customers were kept one or two steps behind, and | | | | an offer. If there is a trade-in, your offer should include |
| 2) Dealerships made lots of money. | | | | how much you want for it. Many websites advise |
| These two developments were aided mostly by the | | | | people to "hide" their trade until they have worked out |
| salesperson and their managers' abilities to control their | | | | a price for the one they are buying. This is absolutely |
| customers. | | | | pointless and incredibly annoying to the dealership (so |
| This, more than anything else, is why the automotive | | | | much so that it can actually hurt the final negotiated |
| industry is the last to jump on the "Buy it Online" | | | | trade difference - this is explained below). |
| bandwagon. From your home or office, the dealership | | | | Online negotiations can be tedious. Emails can take |
| has no control over you. For this reason, 99% of new | | | | time to be answered. In the meantime, the vehicle in |
| and used car dealers with websites use their web | | | | question could sell. If possible, a consumer should initiate |
| presence for one reason: to get you to their lot. | | | | a phone conversation to discuss the money. The |
| The few who do offer ways to buy a car completely | | | | consumer should be prepared with information on both |
| over the internet and via telephone are the ones who | | | | vehicles, including payoff on their trade-in. |
| will eventually pave the way. The quality of cars, the | | | | While Edmunds and Kelley Blue Book are excellent for |
| length of warranties, and the information available to | | | | finding information about vehicles, their trade evaluators |
| consumers are all increasing. With a bit of research, | | | | are usually inaccurate. Black Book is used by |
| people are able to decide which vehicle fits them best | | | | dealerships and offers realistic trade values. |
| without going from dealership to dealership test driving | | | | Once both parties agree on a price or trade |
| cars and collecting brochures. | | | | difference, payment can be arranged. Whether |
| A Bit of Research | | | | through online credit applications or simply having the |
| New cars are simple to research. Sites like Kelley Blue | | | | dealership fax a buyer's order to the consumer's bank |
| Book offer a smorgasbord of reviews, photos, and | | | | or credit union, it is not difficult to pay for a vehicle via |
| pricing information. Search Google for the vehicle you | | | | internet, telephone, or mail. |
| are considering and literally millions of results beg to be | | | | Finally, arrange to have the vehicles and paperwork |
| clicked and read. | | | | transported or set an appointment to finalize the deal |
| Used vehicles are a bit trickier, but it is still possible to | | | | at the dealership. If the paperwork is to be transported, |
| get almost all of the information needed to make a | | | | the consumer will want to talk to the finance manager |
| decision. Classified automotive search sites like | | | | to discuss any warranties, fees, and insurance |
| Cleveland Used Cars offer a diligent consumer a place | | | | considerations before the paperwork is drawn up. |
| they can find their perfect vehicle. | | | | If the deal is to be consummated at the dealership, the |
| The roadblock occurs at the intersection between the | | | | consumer should still talk to the finance manager. They |
| consumer and the dealer. They both lie to each other. | | | | will want to talk face-to-face about other products. Let |
| Not all of them, of course, but enough to where the | | | | them talk to you about everything over the phone and |
| trust level between the two is just below Hillary and | | | | ask them to have the paperwork drawn up before |
| George W. and just above Syria and Israel. The | | | | you get there. Finance is the last, best place for the |
| dealerships started it with shady tactics and the | | | | dealership to make some money, so they will not do |
| consumers are fighting back with techniques taught by, | | | | the paperwork ahead of time unless you ask. |
| yes, a barrage of websites dedicated to cutting the | | | | The Truth About Trade-Ins |
| dealers' bottom lines. | | | | If a dealership whittles their price down, then learns of |
| Some dealer websites are able to give just about | | | | the trade, they will simply offer less for the trade than |
| every bit of information about a vehicle that is available | | | | they would have prior to negotiations. Here is a realistic |
| before the customer drives out. Still, even technically | | | | example: |
| advances dealers like Bristol Honda Dealers and Los | | | | If their car is listed at $20,000 and the trade-in's actual |
| Angeles Kia Dealers are finding roadblocks in | | | | cash value (ACV) is $5,000, the dealership might make |
| implementing a completely online transaction process. | | | | an initial offer of $20,000 for theirs and $6,000 for the |
| Breaking through Roadblocks | | | | trade. |
| Nick Umbs, Internet Manager at Ted Britt Ford in | | | | This is a necessary dealer "trick" because the vast |
| Virginia, has tried to bridge these gaps through eBay | | | | majority of customers believe their trade is worth |
| and other methods. | | | | more than it really is. Dealerships can "show" more in |
| "We start out by posting 35-50 detailed photos along | | | | the trade by decreasing their profit and run less of a |
| with a highly detailed description of the vehicle," said | | | | risk of insulting their customer. After all is said and |
| Umbs. "We want the customer to feel like they are | | | | done, they are still counting the trade in as a $5,000 |
| actually at the dealership with the vehicle. We don't | | | | car. |
| want them to have any unexpected surprises upon | | | | Now, after some more negotiating, both parties might |
| delivery. | | | | agree at $19,000 purchase price and $6,500 for the |
| "The whole process is very painless with great results." | | | | trade-in, yielding a trade difference of $12,500. In this |
| Using their prowess with eBay and an eAutoDrop | | | | case, the dealership most likely raised their ACV of the |
| option for consumers, they have been able to sell and | | | | trade-in to $5,500 because they wanted to make the |
| ship vehicles around the country and across the world. | | | | deal work and it was negotiated in good faith. |
| Another problem is with the trade-ins. While most | | | | Given the same situation but where the consumer |
| dealer websites offer photos, a complete list of | | | | doesn't mention the trade, the dealership might offer an |
| options, an available vehicle history report, and a | | | | initial $500 discount from the $20,000. Back-and-forth |
| promise that their used cars have been inspected and | | | | they negotiate and agree on an $18,000 selling price. |
| reconditioned by their service department, most | | | | Then the trade is brought in. |
| consumers want to know their trade-in value based | | | | The dealership will still think the vehicle is worth $5,000 |
| upon make, model, and miles. | | | | and will probably offer that much since they have no |
| Diffee Ford Lincoln Mercury in El Reno, OK, handles | | | | room "show" more money in the trade. Many |
| distant trade-ins as part of their Buy a Car Online | | | | dealerships might even offer a little less out of |
| process. Step 2 of their process has a page where | | | | annoyance. Chances are very high that they will not |
| the consumer can answer several questions regarding | | | | budge from the $5,000 ACV, so negotiations end. The |
| their vehicle and its condition. They are asked to send | | | | consumer can either take the $13,000 trade difference |
| photos of their trade-in so that an accurate value can | | | | or not. |
| be placed on it. | | | | The Future |
| "We have been able to sell dozens of vehicles to | | | | The ability to complete a vehicle transaction over the |
| out-of-state customers because of 100% disclosure | | | | internet and telephone is slowly working its way |
| on both ends," said Dandy O'Connor, Customer | | | | towards fruition. The advantages are aplenty for both |
| Resource Manager. "We don't expect them to buy | | | | consumers and dealerships. It would broaden the |
| ours if it isn't what we described, just as we wouldn't | | | | options of consumers, decreasing the need to settle |
| take theirs if we were misled. Since we started the | | | | for a vehicle that isn't exactly what they want. It would |
| program, we haven't had any of these deals go south." | | | | expand the potential customer base of dealerships by |
| Their list of customers last month includes buyers from | | | | making distant buyers more accessible. |
| New York, Arizona, New Mexico, Texas, Kansas, | | | | As of now, the consumers want it, but the dealerships |
| Nebraska, Illinois, Arkansas and Florida. | | | | are hesitant. They will all eventually break under the |
| Buying Online in Today's Marketplace | | | | weight of necessity as more dealerships learn the |
| The industry is reluctantly heading towards less | | | | lesson that "sometimes, it's okay to lose control. |
| face-to-face contact. Until it fully gets there, consumers | | | | |