Why everybody loses

DrivingSales detailed the customer dissatisfaction and unpleasant experiences in a recent post.

AutoTrader provided an exceptional example which really drives this point home. According to their news release: Lynn V., an avid online car shopper, drove this point home in a recent conversation with AutoTrader.com where she said, "I went online and narrowed it down to two different dealerships. One was very good about communicating with me via email, was explicit in putting out an offer—very detailed. [They] included a price in the offer and invited me to the dealership. The other dealership, which actually had my first choice of color "wouldn't give me specifics in email."

She continued to try and work with the dealership that had the exact vehicle she wanted, but they would not communicate with her effectively the way she wanted, and her in-store experience led to her decide against doing business with that dealership:  "I will never go to that dealer again, even though they were probably 40 miles closer to my house. I was willing to spend the time and make the drive for a dealership that honored its word and treated its customer right."

Lynn V's frustration that her local dealer would not share detailed pricing information illuminates why dealers continue to resist online retailing. Dealers price people, not products. Their goal is to maximize the profit from the sale of a car, trade-in value, financing and aftermarket products for each customer. This means sharing as little information as possible and 3 to 4 hours in the dealership. While adequate pre-internet, this process is the root cause of declining dealer profitability. Customer and employee loyalty both average around 25%.

Stated in a more pragmatic way, customer churn (customers who buy the same make vehicle but from a different dealer) and salesperson churn (on an annual basis) both average 75%! The current sales/purchase experience isn't working very well for either side!

Dealers embracing the internet (or just encouraging you buy a car online) would significantly increase their profitability, and more importantly, customer loyalty and satisfaction.

repost from vinadvisor.net; not written by me

Easy to miss factors that will get you a better price

Lifehacker published a great article about haggling. It’s a great resource. Here are some highlights:

Use the carrot, not the stick:
You’re talking to a human being who’s under no obligation to help?smiles and charm can work a treat, whereas demands will make you an enemy.

Haggle with the right guy:
Some employees won’t have permission to discount their goods. Try instead to speak to their supervisors.

Wait ’til the end of the month:
Some salespeople have monthly targets to hit, and will do anything for a sale when they have a big bonus in their sights.

Good advice, but missing "haggling central," the dealership. Three things to consider when haggling over a new car.

1. Dealers price people, not products. Ever asked, "how much is this car" only to be asked a question about your family or lifestyle? Dealers expect each customer to pay a different price for a new car, trade-in, financing and aftermarket products.
2. Incentives matter more than discounts. New car margin—MSRP less cost (invoice)—has shrunk considerably. Make sure you get all available incentives on car (interest rate/cash), customer (loyalty/conquest) and affinity (Sam's Club, USAA, employer & more).
3. Only negotiate total price. Dealers often negotiate over a "sale price + T,T &L," but taxes, title & license add thousands in costs. You wouldn't press purchase online until you knew the total price, right?

Always compare the total price before saying yes to save time and money!
Consult our car buying checklist to make sure you’re prepared before you walk in.

Also, as always, you can just buy your car online with us and make negotiation much, much easier.

repost from http://vinadvisor.net; not written by me

Who actually owns the data our connected cars generate?

Autoblog posted some interesting statistics and perspectives on connected cars.

But in the spirit of being connected and productive, there is a convergence ahead where the Internet of Things meets the connected car. In the same time period we can expect connect car shipments to surge, Strategy Analytics predicts that by 2020 there will be 33 billion connected devices, with spending on smart systems for the home to reach $130 billion globally in that same time period. Lighting systems, intelligent speakers, thermostats, home security, televisions, appliances ? connected and ready to deliver on your needs reactively and in many cases, proactively with more AI and conversational interfaces.

The connected car is already here "today’s average car has 25 to 50 central processing units (CPUs)" and yet for all the discussion, little has been said about who owns the data stored and shared by these computers. I guarantee you every manufacturer has a legal team working to drive their needs when it comes to this issue. The National Association of Automobile Dealers (NADA) continually lobbies on behalf of 16,000 dealer members. So who is advocating for the consumer? Why do the majority of consumers find car buying and ownership so frustrating? They have no advocate. See how the game has changed at www.vinadvisor.net?you can do a lot more than buy a car online.

originally published on vinadvisor.net; not written by me

What You Need to Know Before You Buy a Car

Lifehacker covered auto insurance myths we need to stop falling for. One myth not covered is that your insurance will pay off your loan with a total loss.

A total loss within a year of purchase on a new car that is financed could mean leave you paying $3,000 to $10,000 (current value ? loan payoff) for a car you?ll never drive again. Guaranteed Asset Protection (GAP) is available on most new cars and standard on most leases ? the lease acquisition fee pays for the coverage ? to protect the lessor and you. GAP coverage is one of three reasons why leasing is the safest way to pay for a new car. For more check out vinadvisor.net’s FAQs.

• Insurance only pays out for the post-total value of your car. Hopefully you?ll never get into an accident where you total your vehicle, but no, your insurance company won?t just pay you what the vehicle is worth after the wreck (which in many cases, is next to nothing.) They?ll pay out for its value before the crash, but be warned?that?s probably not even close to what you might think it?s worth, or even close at all to Blue Book value.

• Insurance covers mechanical repairs and breakdowns. Again, this is usually something new drivers wind up believing, but no?your auto insurance doesn?t cover mechanical failures, wear and tear, and other breakdowns that are just part of owning a vehicle. It?s why it?s so important to find a mechanic you can trust, keep up on your preventative maintenance, and learn to do some repairs yourself. Even worse, calling your insurance company over and over to claim mechanical failures will lead to higher premiums for you in the long run.

originally published on http://vinadvisor.net; not written by me 

Why do we still have to spend hours in a dealership to buy a car?

Technology has dramatically simplified our lives, except when it comes to car buying. Why do we still have to spend hours in a dealership to buy a car? Now you can buy any vehicle from any dealer on any device with vinadvisor. We put the essential market data and easy-to-use tools into your hands. And most importantly, we only work for you. Our vehicle shopping cart revolutionizes your purchase experience with complete transaction transparency. Negotiate online, you’re in and out of the dealership in less than an hour because with vinadvisor it’s your turn to drive.

originally published on http://vinadvisor.net; not written by me

Car Shopping

Jim Dykstra: The evolution of car buying. From horse trading to the self-driving car. The most important thing to understand about a horse trader is, horse traders didn’t price horses, they priced people. “How much can I get from this gal? How much from that guy?” Not surprising, that that led to more than a few disagreements. Then in 1908, Henry Ford begins mass producing the Model T. The dealership’s born. But as we move from horses to cars, dealers continue the tradition of pricing people rather than products. It’s still buyer beware when it comes to buying a car.

Car Buying Online

Technology has dramatically simplified our most complex task. It’s made it easy for anybody to buy and sell stock online at E-Trade, to prepare and file your taxes with TurboTax, buy a ticket to a concert tonight with StubHub, or book a trip around the world. But when it comes to shopping for a car online, every click seems to lead you to the dealership. Why do you have to sit in a dealership for three hours while people run in and out and throw numbers at ‘cha, asking you to buy a car? Why is it that car buying has become the land that time forgot? Look, Eli Musk made battery-powered cars cool and sexy, his next project is put a man on Mars. Some people say he’s from there, so hashtag, going home. But the real question here is, why is it still so hard to buy a car?

My name’s Jim Dykstra the Founder and CEO of vinadvisor and it’s our mission to transform the purchase experience. To make it easy for you to buy any vehicle from any dealer on any device. We put the essential market data and easy to use tools into your hands so you can confidently buy a car online. Assured you’re getting a fair price on your next car, and your trade, and fair treatment and financing because we only work for you. Vinadvisor does not charge dealer fees of any kind. Vinadvisor has dramatically simplified the purchase experience. We put the essential information into your hands in the form of a vehicle shopping cart so you can easily compare new or used cars, confirm incentive eligibility, trade value, and even shop by monthly payment. It’s easy for the first time ever. Because nobody should have to sit in a dealership for three, four hours to buy a car. Look at your vehicle shopping cart when you’re ready, click to buy, choose a local dealer. You’ll negotiate online and once you and the dealer agree to a price, set an appointment to sign and drive. When you get to the dealership, the car’s ready to go. The paperwork’s ready to go. In and out in less than an hour. You don’t have to buy a car the way your grandparents did. Because at vinadvisor, it’s your turn to drive. Visit us at http://www.vinadvisor.net.

Top 5 Tips For Car Shopping

originally published on http://vinadvisor.net; not written by me

They buy and they buy online. The time for car buying online is here and vinadvisor is ready. The Sovereign Investor broke down just how big the Millennial revolution will be, especially in the automotive market.

Second, the millennial generation is global. By that I mean there are more than 2 billion people around the world who are between the ages of 18 and 34 today. And because so many of them have grown up with the Internet and smartphones, many of their tastes and preferences are the same ? regardless of whether they live in Dubai or London or Mumbai or New York.

Millennial Car Buyers

Well it turns out this biggest generation is changing the market

Now, you should understand that millennials are already making their presence felt in our economy. A recent survey by Zillow, an online real estate company, shows that millennials account for 47% of home purchases today.

In addition, millennials represent 28% of all car buyers and account for over $1.3 trillion in spending.

originally published on vinadvisor.net
not written by me

What Consumers Expect When Shopping for a Car Online

People Still Want a Better Purchase

Accenture released an interesting study that published results comparing “digital natives” and “digital laggards” in a 3-country study that analyzed dealer tendencies. Digital natives was termed as frequent online shoppers and digital laggards was termed as less avid online consumers. According to Accenture:

Consumers who spend more time car shopping online end up visiting dealerships more often. But those stays are relatively short.

The 3-country study indicates 60% of natives stopped at a dealership more than two times before buying a car. Forty-seven percent of the laggards did so.

Although natives visit dealerships more often, they spend less time on the premises because they make most of their purchase decisions beforehand online, according to the study.

Accenture says that underscores the recasting of a dealership as a place to finish the vehicle purchase rather than as a starting point of vehicle shopping. The study says many customers don’t see the need for in-person interaction at every stage of the transaction.

The survey cites a “digital paradox”: The more information digital car shoppers get, the more they want a rewarding dealership experience.

“They are visiting showrooms to seek distinct information to supplement the information found on the web, and want counsel from product and customer experts instead of a traditional sales presentation,” says Axel Schmidt, Accenture’s managing director-automotive practice.

The study polled consumers in the U.S., China and Germany, major auto markets with different buying preferences.

The most surprising thing to me when I read about consumers ready to buy cars online and their expectation for a better experience is that anyone reading the article is still surprised. Is the best dealers can do is suggest consumers plan to pay bills, plan vacations or catch up on emails or anything else they need to do online except buy a car?

by Jim Dykstra and William Soule

Your Turn To Drive, Episode 5 discusses what you need to know before you try to finance a new car. Jim Dykstra, CEO of vinadvisor, Marc Dubis of Car Folksand Joe Webb of Dealer Knows are the panel of experts to help you with some inside tips and information to help shed light on the auto finance path.

Understand car depreciation

Jim Dykstra

Welcome to our Top Six Auto Finance Tips. First up, understanding that when you finance a car, it’s literally like nothing else you’re gonna finance because of the speed at which the car depreciates. If you’re a lender, you understand that a car is gonna be worth 20% to 30% less in the first 12 months, and maybe even as much 50% less in the first 24 months. So, the number one criteria for any auto lender is to evaluate the loan-to-value ratio. If you wanna borrow $20,000, and the car you’re borrowing it against is worth $30,000, that’s great. That’s a 66% loan-to-value ratio. If you wanna borrow $30,000 against a $20,000 car, that’s a 150% advance and there’s almost no lender who would even approve that deal. And if they did, the interest rate would be extraordinarily high to try to cover their risk.

Research auto valuation websites

Marc Dubis

That’s a good point, Jim. You need to know what the price of the vehicle is gonna be. And on a new car, that’s pretty simple. They have what’s called the manufacturer’s suggested retail price, or in the jargon, MSRP. So you can take a look at the window sticker on a new car. On a used car, what you wanna do is check the used car guides online. You have Kelley Blue Book at kbb.com, or edmunds.com which will provide a used car value. Now, remember, these are only guides. Things will vary based on your market, the type of vehicle, the mileage, and the condition of the vehicle. So it’s important to take a look at that.

#3 — Research vehicle incentives

Joe Webb

Now, that you have those figures, knowing what you can and cannot afford, do a little homework. Go into the manufacturer’s site, find out if there are any local incentives that are going be applicable for you that you qualify for, so you understand exactly what the best rate that is available to you. And then check with your bank. Don’t just go ahead and get the loan from your bank. Check with your bank and have all the numbers prepared so when you go in, you know exactly what you can and cannot afford on a monthly basis.

Gather your personal paperwork

Jim Dykstra

Next up, a couple of simple things that are too often overlooked. Number one, getting prepared to fill out the credit application. So, first and foremost, check your FICO score to make sure all that information’s accurate. If not, contact the bureaus. Number two, plan on income verification. You’ve got a full-time job, plan to bring your pay stub. If a year-end just came and passed, bring a year-end stub, as well as a monthly stub, same for your spouse or whoever else who might be signing. If you’re in a business for yourself, that means at least one or maybe two years of tax returns that the lender likely will wanna see. Number three, insurance. Don’t forget that, even if you have full-coverage insurance on whatever your driving right now, your insurance is likely to go up because you’re buying a brand new car or leasing a brand new car, and the value of that car is going up. So, important to be prepared, important to have this information available, at least, one or two references as well.

Your car affordability calculator

Marc Dubis

After establishing a fair price for the vehicle, you wanna calculate exactly what you’ve got in your monthly budget that you can afford for a car payment. So, the first step is to take a look at what your net take-home pay is. What do you have that’s spendable after your taxes? Then, from there, you wanna deduct your mortgage payment or your rent, your utility bills, your TV, your telephone, your cell phone, any other credit card payments or loans that you’ve got, and then your food. So that will give you a number that’s left over which will comfortably handle your car payment, and you may not wanna spend that full amount, so you take a portion of that. Then you wanna estimate what your buying power is gonna be. So, if you calculate you’ve got about $250 a month that you can spend on a vehicle, at a 60-month term at about 3%, you’re able to finance around $14,000. So if that’s correct, you get with your car sales person or the manager at the dealership, confirm that your numbers are correct on the vehicle you’re looking at, and then go out on the lot and find a vehicle that will fit your budget. So you can back into it that way. That way you’re able to get a payment that meets your criteria, covers the things you need to cover, and provides the vehicle you want and need.

Car dealers can offer the best rates

Joe Webb

I love telling a quick story. I am in the automotive industry, and even when I was buying my most recent car, I went ahead and did my due diligence. I went on to bankrate.com, found out what the local rates were available to me, and then I went to my own bank, my own branch. And they were giving me a… I think it was like a 2.29, a really good rate, but a branch only goes and gives five or six loans out of each branch a month. When I went to the dealership, the dealership was able to get me a loan with my own bank for a full point less than what my own bank was willing to do. So recognize that if a dealership is able to give out 200, 250 loans every single month, they have a lot more buying power and rate power than I do as an individual person going into my own bank. That’s just one story that I always share with everybody. Do your due diligence. Know your own figures. Know your credit score. You can pull it from Experian, you can pull it from TransUnion, whatever you prefer, and know your numbers on what you’re comfortable with, and then go into the dealership and see what you are being offered by them.

reposting from vinadvisor.net

Techcrunch is reporting that Beepi will merge with Fair, the new auto startup founded by Georg Bauer (formerly of BMW, Mercedes-Benz and Tesla), Scott Painter (TrueCar) and Fedor Artiles (Mercedes-Benz, Chrysler, Volkswagen, and Tesla).

After going through nearly $150 million in funding, peer-to-peer used-car marketplace Beepi.com is shifting gears. TechCrunch has learned and confirmed that the startup is shutting down its operations outside of California, laying off 180 staff, and merging its remaining business with Fair.com, a new venture co-founded by several car industry veterans that has yet to launch.

The need for auto retailing innovation — less than 1% of all new & used cars sales are conducted online — remains strong even as Beepi struggles to reinvent itself. Beepi’s model offered more service but too little transparency. Consumers want a transparent, online purchase they can trust far more than a flatbed truck in their driveway. Seems hard to believe putting a car on a flatbed truck 2 more times than traditional dealers would improve operational efficiency. Consumers want a transparent, online purchase comparable those they find when they buy stock, book a flight or prepay for a hotel room.

They want visibility into transaction prices, incentives and all related costs fees so they can buy with confidence. A consumer interested in buying $40,000 of GM stock can see the average share price based on the prices paid by thousands of buyers on any screen or device within reach. But if that same consumer tries to buy a $40,000 Chevrolet, it seems the best they can get is a handwritten price from a salesperson they just who claims they’re getting a great deal. Transparency combined with an efficient, online purchase experience will allow more people to buy more cars more often.

So what’s next for Beepi and Fair?

There are not many details yet of what the three plan to do with Fair, or when it will officially launch, but it’s fair to assume (sorry) that it will involve another go at the business of trading in cars with a very extended wrapper of customer service around that.

Fair’s site, as it is now, hints at a platform for people not to buy cars outright but instead move to a flexible leasing model and a car selector based on your finances. "Enjoy the freedom to drive the car you want for as long as you want," it notes. "And when you're ready, you can trade up, try something new, or just walk away."

As for car buying online? Only time will tell if one of the major first players taking a hit will have a deep impact. But this much we know, without maximum transparency car buying online will struggle to scale.

By Jim Dykstra, Founder www.vinadvisor.net (beta)
jim@vinadvisor.club

original post: http://vinadvisor.net/blog/744-beepi-collapse-underscores-car-buying-online-need-for-transparency