Where They Should Intersect

Jalopnik had an excellent comment of the day (kudos to cleverusername):

Ewber. Where you can carry a gun, flirt with other occupants, and just generally make whatever bad decision you want. We may want to find a way to invent affordable disposable cars, though. Nobody wants to follow up your party.

Okay, this is obviously a joke, but ride sharing isn’t—usually.

Now, it’s not that dealerships aren’t utilizing technology per se; dealership online marketing is truly as advanced as online marketing gets?it’s just that it could be better spent elsewhere. There’s hundreds of man-hours and substantial dollar figures invested in drawing web traffic, qualifying the leads, following up, etc., but when that customer is finally on the sales floor there’s a big step back to the Stone Age. Instead of that, why not take those leads to a page where they can lease a car online, buy a new car online, or chat if they have questions?

originally published on vinadvisor.net, http://vinadvisor.net/blog/705-ride-sharing-relates-to-buying-a-car-online

Goodbye Lead Gen, Hello Online Car Sales

Stop Investing in Lead Gen, Start Working Toward Online Car Sales

Wards Auto published an article about how car dealers can meet millennials.

With 80% of car buyers using some form of digital technology to research their options before entering a car dealership, auto dealers face an extremely competitive market.

To top it off, they?re tasked with a new challenge: selling to the millennial buyer. According to research done on Millennials, this generation is a lucrative target predicted to spend $138 billion on light vehicles this year.

Grandpa and his 25 year old grandson both invest online with ETRADE but neither can buy a car online. Less than .5% of the US’s 53m new and used cars sales will be sold online in 2016 yet 85% of consumers expect to negotiate and buy cars online. Goodbye lead gen, hello online cars sales. The definition of selling is still to find a need and fill it. Will your dealership choose the right time to start? Borders didn’t fail from a lack of industry knowledge but because they waited too long to start selling online.

Dealers who recognize this inflection point and invest in selling online will be rewarded with sustainable market share and profits that will transform their dealerships.

originally published on http://vinadvisor.net

Cars For Sale Online Talk Of Auto Show Circuit

Auto Industry Innovation

Cars For Sale Online

While there are many startups looking to break through the conservative approach of the auto industry (Carvan, Beepi, vinadvisor), there has not been great progress using digital and social channels to sell vehicles online.  That is changing now, as is apparent to the many people attending auto shows, as reported by the Tampa Bay Times.

What does it look like to buy a car in 2016?

It’s researching cars online from home, then taking virtual test drives on a computer or phone. It’s reading reviews from experts and other consumers, then texting or emailing with dealerships to find the right one.

Then maybe you go in to see the car. Or maybe you just have it delivered to your driveway.

“I have a sales manager who did a deal completely via text,” said Richard Dimmitt Jr., co-president of Clearwater’s Dimmitt Automotive Group. “He never even met (the client) until he came in to drop off the check.”

Dealerships from throughout Tampa Bay are on hand this weekend for the Tampa International Auto Show, which kicked off Friday. Beyond the fancy features like self-parking cars, or vehicles that can interact with the driver’s cellphone or can sense when the car in front is braking, dealerships are adjusting to a new era in car sales.

And the traditional digital giants and major players are very excited about this development…

Derek Humphrey, Google’s account executive who works exclusively with General Motors Co., told a crowd Friday morning that consumers purchasing a car this year on average visited 1.6 car dealerships. In 2013, the average was five.

“They walk in already knowing what they want. ? Some will even have the VIN ready,” he said, referring to the vehicle identification number. More than ever, car dealerships and manufacturers have to appeal to Web-savvy consumers, he urged a group of local Chevrolet dealers on Friday morning. “You have to be able to get their attention online.”

He reiterated a statement from a former Hyundai executive who said many consumers would prefer a root canal to buying a new car.

Vinadvisor has been spending considerable time and effort developing the conversation around car buying online through branded content marketing and auto influencer campaigns we couldn’t be happier others are getting on board.

originally published on http://vinadvisor.net

What They Actually Do Care About, And What Works

Dealerscope published this article about how car dealers can reach out to millennials:

While things like tracking pixels and cookie data might be uncomfortable concepts for older generations, Millennials respond well to targeted advertising. The only caveat is that the advertising needs to be conversational. Research shows that Millennials don’t like to be talked at, meaning traditional advertising can feel untrustworthy. However, Millennials do want to be engaged, and 62% of them are more likely to become loyal customers if they believe a brand can identify who they are and communicate effectively on social networks with them.

What does this mean for car dealers? Pioneer’s observations speak to digital native’s expectations for a multi-device, transparent experience that informs and reduces friction. When millennials have a real interest in a product, they can quickly become more informed than many product specialists or salespeople. Conversely, if their perspective is more practical, they can enter the market underinformed or even misinformed.

This creates a big challenge for auto retailers. The reticence of new car dealers to move the purchase experience online is compounded by their legacy belief that more information means less profit. Enthusiast millennials — they did make the Fast & Furious franchise — are frustrated at every turn. They can’t buy a car online and after filling out a few lead forms are barraged with emails, text messages and calls. Conversely, millennials who see transportation as ubiquitous rather a defining characteristic of their personal brand, are equally frustrated when they realize they are expected to sit in a dealership and buy a car much like their parents did.

Until new car dealers commit to millennials, millennials will not commit to dealers. They will buy less, chase experience over price and won’t refer their friends.

originally published on vinadvisor.net

How and Why They Are At Odds

You’ve probably read Fortune’s recent article, Why Car Dealers Really Hate Tesla. They highlight the following key fact:

Tesla, the all-electric automaker and energy company sells its own cars directlyonline and through its own branded stores, not through franchised dealerships. The company has one store and service center in Virginia as well as one ?gallery,? where customers can look at the cars but not buy, or even test drive or discuss the price. And Tesla wants to open up one more store, where it can actually sells its vehicles, in Richmond.

The issue of allowing manufacturers or hybrid ownership under current franchise law exists not because Tesla or manufacturers are committed to ?taking down franchise law,? but because Tesla and manufacturers understand that franchised dealer system is at an inflection point. Dealerships are a vital part of every local community they serve, but their strategy to lobby rather than address operating inefficiencies is what has created these attacks. Until they address their core problems, the attacks will grow.

Less than ½ of 1% of the US?s 53 million new and used cars sales this year will be sold online. Manufacturers and dealers together spend $34 billion annually to sell 17 million new and 9 million used cars by driving millions of consumers to 20,000+ non-transactional websites. Why? They believe more information means less profit. (Just try to find an FAQ page on a dealer website.) Instead, dealers insist consumers visit the dealership and endure their legacy sales process where they price people rather than products. While commonplace 20 years ago, this degree of transaction friction is unsustainable for new car dealers.

Dealers would be better served to focus on improving their competitiveness. While dealerships are important employers and most often the largest local source of tax revenue, their inefficiency is undeniable. They average just 30% service, 25% repeat purchase loyalty and churn 70% of sales people annually. Why? Their 3 to 5-hour sales process limits a salesperson?s income and consumer satisfaction. How long will the industry spend $2,000 per new car sold in advertising to sell to consumers not likely to return? Their fight is not with Tesla, but within.

originally published on vinadvisor.net

originally published on http://vinadvisor.net

How Old Of A Used Car Should You Buy?

This week’s episode of Your Turn To Drive asks How Old Of A Used Car Should You Buy? Depreciation of a new car happens very fast in a very dramatic way.We’ve lined up a panel of experts — Jim Dykstra of vinadvisor, Philip Reed Of NerdWallet and Jaclyn Trop — to discuss what information you need to hit that sweet spot of when a used car is most valuable.

Used Car Valuation

Jim Dykstra
Welcome to the first in a series of video blogs designed to simplify car buying and ownership. First up, ?what age used car should I buy to get the most out every dollar?? What?s the sweet spot for car ownership? First we need a quick review on how cars depreciate. A new car depreciates approximately 12% per year over the first 5 years and then flattens to just a few per cent per year. The cost of any car is not the purchase price, but rather the purchase price ? trade or sale price + any significant repairs.
What age car can give you the lowest cost for 3 years? Spoiler alert, it?s not the first 3 years. The average new car depreciates 45% in the first 3 years, 25% in the first year alone. This is why the majority of consumers who want a new car should lease rather than buy.

Car Depreciation

Philip Reed
The allure of new cars is so strong for most people. But if you’re interested in saving money — in driving a near-new car for the least amount of money — you need to look at how depreciation works. This is the dirty little secret of new car buying. But there is a way to beat the system and avoid that big hit. As Jim pointed out, cars depreciate 45% in the first three years. But most of the depreciation is in the first year. Combine this with the fact that there is an upturn in leasing — it’s almost 1 in 4 new cars now — and this means a flood of three-year old cars are coming back into the market. Buy one of these cars and you’ll have a near new car with about 36,000 miles on it and will pay much less depreciation. Are there downsides to this rosy scenario? Perhaps.

Jaclyn Trop
If you’re considering buying a used car, I think only two considerations matter. Are you buying, let’s say, a three-year-old car because it’s at the end of a lease, still in great condition and it’s a lot less expensive than a new car? Or, are you buying someone’s headache? The financial deal may sound enticing, but are underlying issues with the vehicle not readily apparent from a cursory look or if you’re buying strictly on impulse? For either scenario, it’s well-worth the additional cost to have the vehicle inspected by your current mechanic or an independent mechanic via a friend’s recommendation. Acquire the vehicle’s history in detail and research several well-established automotive sites and compare used car price listings.

Jim Dykstra
Great points guys. The key points for a consumer considering what I would define as a premium used car ? 2 to 3 years old and less than 50,000 miles ? are prior ownership, reliability and an exit plan. There is a big difference between buying an off lease vs a rental car. On off lease car has had one owner (Lessee). A rental has had a lot ?relationships,? by no means does this disqualify the car but I wouldn?t pay the same for two identical cars if one was leased and the other rented. To James? point, check to make sure any open recalls have been fixed. Check the Fair market and trade value of your car annually to see the trend line for your investment. In general, if you guy a car with 40 to 50k miles, your best bet is usually to get out prior to 100k miles or keep it for as long as it?s good to you.

Philip Reed
I like the idea of having an exit plan even before you buy the car. 100k miles is a big psychological milestone that will hurt the value. Another consideration is the fact that, around 75,000 miles, most cars have a major service visit that can be pretty pricey. Plan around these events and you’ll minimize your ownership costs.

Jaclyn Trop
Another potential area to consider is the vehicle?s pedigree. Its previous private owner(s) or history as a rental or leased vehicle is certainly important. But every year some manufacturers? brands are at the end of their time and are discontinued, some after long tenures, some short. If you?re considering, for example, a Ford Flex, Chrysler 200 convertible or Jaguar XK coupe or convertible, would you further consider or perhaps change your mind since all three cars were no longer available new after their 2015 model years? I?d like to think those three cars might be available at good prices since they?ve been discontinued. Then again, I?ve never seen many Chrysler 200 convertibles. If you?re buying one now and you?re young enough, perhaps in 25
years you?ll own a classic. And maybe it will be worth more than you paid for it.

Jim Dykstra
Some great thoughts from Phil and Jaclyn to round out our look the Sweet Spot of ownership. A checklist as you start to shop for your next car or truck:
1. Age ? to most for least, buy a 2 ½ to 3 years old car and drive for 3 to 4 years.
2. Mileage ? the cost of maintenance rises with miles, look at selling before 100k miles
3. Ownership ? get a clear picture of who owned and drove your next car. 1 owner or rental matters, a lot!
4. Pedigree ? if you?re buying the last of a particular model, think about who will be interested in buying it in a few years.
Most importantly, invest some time to get prepared. An impulse decision to try a new restaurant is not very risky, walking into a dealership or agreeing to buy a car off Craigslist could be an expensive impulse!

originally published on http://vinadvisor.net

Changing landscape of car buying online

Vinadvisor is excited to kick of the digital video series Your Turn To Drive with our inaugural episode How has technology changed car buying? Jim Dykstra, founder of vinadvisor, has teamed up with Joe Webb of DealerKnows Consulting and Shawn Ryder of D2C Media to discuss the challenges facing the car industry due to rapid digital expansion in the online auto space.

Online Car Buying

Jim Dykstra:
I’m Jim Dykstra. Welcome to our new series on how technology has changed online car buying. Technology’s greatest benefit, by far, to the consumer has been to simplify their most complex purchases and tasks. It’s easy now to prepare and file income taxes, to buy and sell stock online, to manage your 401K, or even to buy a ticket to a sold-out concert tonight, while you’re riding in the backseat of a car. Consumers will spend more and more online every year for the three simple reasons, really. Number one, convenience. They can shop, compare and buy a car, any time, any place. They don’t need to be in a store. It gives them complete freedom.
Number two, the internet’s access to more information and more products, so they can compare more items, easily shop, compare features, benefits, price, shipping costs, etcetera.
And most importantly, price transparency. And while we all say to ourselves, “I want the best price possible,” what consumers really wanna make sure of is that they got a fair price every time. Fair price and fair treatment. It’s really not asking all that much.
So how can it be that in 2016, in the United States, where 53 million new and used cars will trade hands, that less then 1%, in fact, far less than 1%, will be sold online? How does technology miss this category? Let’s turn to a couple of experts to help us understand the problem better and to talk through some solutions. Start with Joe, take it away.

Joe Webb:
We used to be an industry built on cultivating relationships, stemming from emotional decisions, and now, the glut of consumer-facing information out there has required us to become almost transactional in nature. It focuses in the online resource sites that educate consumers nowaday, have required dealers to focus their energies on improving themselves on how they merchandise their product, how much product knowledge their teams have, and the price transparency of their organization. Dealers now have to be focused on two different arenas, not just the showroom floor any longer, but also online as well.

Shaun Ryder:
Hey, Joe, you make a great point. As customer expectations grow, the bar for the dealer raises higher and higher every day. So, as a result, we have to make sure that our green peas and newbies at the dealership have a little bit more training. So, imagine a customer enters the dealership and they are on the sales floor, and they’ve done their YouTube videos, and their spec sheets, and all of their homework, read all the reviews. It makes it difficult, and if there’s no trust between that customer and the sales team, or that individual at the dealership, it’s an uphill battle to climb.

Auto Customer Satisfaction

Jim Dykstra:
Great insights from Joe and Shaun. And I think what they’ve done a good job of is helping us to understand that there’s certainly a ton of value added to the consumer. From the convenience afforded by technology, the ability to shop on any device, whenever they wanna do it, is tremendous. Same as it is with almost every other product. But when it comes time to really compare apples to apples, all the features of car A and car B, new or used, or new to new, lease to lease, and to get a complete transaction price, whether I’m gonna purchase, finance or lease, is almost impossible online. So there’s a big disconnect between consumers aren’t satisfied with the process, and by the way, dealers who aren’t satisfied with it, either. So how do we close that gap between consumers and dealers? Let’s turn back to Joe and Shaun for some more insights.

Joe Webb:
Jim, I see the divide greater than what dealers would like to admit. Consumers see the disconnect. OEMs feel it, but dealers are taking advantage of a strong economy right now, and they’re not focused on delivering seamless, integrated online to showroom experiences, or online to transaction experiences. When times are good like this, dealers must batten down the hatches, and invest time and money, and dedicate effort and energy into ongoing education for their teams, making sure that they have the best communication methods, the most advanced technology their teams can muster, and continue to deliver the least antagonistic sales process imaginable. Then, we’ll get the attention of today’s customers.

Shaun Ryder:
With the amount spent on traditional advertising, print, radio, TV commercials, it’s hard to believe that there’s a hesitation to target customers in their market, looking for vehicles that the dealers have in their lots. If a customer enters in online a make, model, year, geographical location, shouldn’t that start a sales process that meets the requirements of that dealer, and if the customer’s looking for those requested details?

Jim Dykstra:
Joe and Shaun, great job summing up the challenges, particularly on the dealers’ side of the business and what they look like when they get to the consumers. The reality is there’s just too great a divide between consumer expectation, which is reasonable, an efficient sales process more likely to find online with everything else they buy, and the dealers and their ability to deliver upon that. Absolutely the most complex transaction most consumers will ever undertake. Complex on the dealers’ end too, but there’s a way to get this done more efficiently. We gotta connect more dots across the process well before a consumer ever walks into the showroom. The fact that 53 million people are gonna buy a new or used car this year, either through a dealer or from a private party, and that their transaction’s gonna take, let’s just say three hours on an average. Imagine what it will mean, in terms of economic value, if we all could save one hour. Fifty three million hours, be a win for everybody.

repost from vinadvisor.net

Costco Auto Program & GM Collaborate Again for Holiday Sales Event

Car Buying Online Membership Program

Auto Remarketing reported that Costco and GM are teaming up for a holiday sales event program exclusive to members:

The Costco Auto Program has again partnered with General Motors to bring back the Holiday Sales Event for members. During the holiday promotion last year, officials highlighted nearly 58,000 vehicles were sold ? a 34 percent increase above the 2014 total.

Officials explained this year?s event features a selection of popular models from Chevrolet, Buick, GMC and Cadillac, as well as a few vehicles never before offered during the Holiday Sales Event such the Chevrolet Colorado midsize pickup truck, Buick Cascada convertible, Cadillac XT5 crossover and versatile GMC Canyon midsize pickup truck.

The Value of Auto Membership

Membership fees allow vinadvisor  – we charge no dealer fees of any kind – to offer a dramatically simplified online purchase assures members a fair price and treatment so they always save time and money.

See why it’s your turn to drive at vinadvisor.

reblog from http://vinadvisor.net/

3 Reasons to Trade In Your Used Car

Car Trade In Value

Jim Dykstra:
Good morning, Jim Dykstra for vinadvisor, welcome. We’re here, as always, to dramatically simplify your purchase and ownership of cars and trucks. So with that, let’s focus on the question at hand today, “What’s a fair price for my trade?” Or maybe what’s a fair price for my car? There’s really two components that are gonna determine the value of your vehicle, supply and demand, how many are out there, how hot or cold is that car in the marketplace right now, how often do they sell? And then number two, the piece you have the most control over is, what’s the condition of the car you’re driving? Is it in great shape or is it just in good or average shape? And remember, we all tend to think our car is in great shape, particularly when we wanna trade it.

So let’s take a look at what your car might be worth to a dealer and their perspective. In this example, a 2011 Chevy Equinox, most dealers start with the valuation of good. But most consumers start where we’re starting here, excellent, very good, and ultimately good. And that makes a big difference, because when you look at those three valuations of the car, from the highest single transaction point to the lowest, it’s about a $3,000 spread. But when you take the midpoint for those three conditions, excellent, very good, and good, it’s about $1,000 difference between those three cars, or those three values. And that difference is almost always related to the condition of your car.

So what’s the market of value of your car when you roll into the dealership? For your car to even be considered excellent, garaged, washed weekly, literally the kind of car when somebody gets in it, they say to you on a regular basis, “Wow, is this a new car?” That’s how good it has to look before you get to the dealership. A $250 detail is not gonna make the car look like that. A dealer looks at cars every day, they know. Very good, similar but a little more wear. Good is where most cars are gonna fall, and that’s certainly where most dealers are gonna start the valuation process. Fair, that means a little rough around the edges, probably hasn’t been in the garage very much, it’s got rained on more than it’s gotten washed, if you know what I mean, and it lives outside. So be honest with yourself about what the value of your car is. Just one simple attempt, wash it more often, that will make a lot more sense and help you in terms of valuation.

Should I trade my used car in to the dealer or do I sell it myself?

I get this question all the time. And the answer is, “Whatever the right answer is for you.” So a dealer starts by looking at a trade-in from good condition, if you will, and if you compare that to the value of that car, when you look at, say, a private party price on the marketplace, the difference between those two numbers is about $2,000. So most consumers would say, “Wow, for $2,000 I’ll sell it myself.” But here’s what you need to understand, to be able to garner that $2,000 of profit, you’re gonna need a couple things, ’cause the average dealer spends over $1,000, at least, to sell your car. $700 to recondition it, safety inspection, dealers always put new tires on, really just for liability, because if they don’t know the quality of the tires and there’s an accident, they’re likely to be in a litigation issue, so they always put new tires on used cars. And they’ll spend $300 to $400 advertising. So even after that, their cost basis really is $13,500, if they get $14,500 there’s about a $1,000 profit opportunity. And remember, it takes a dealer who does this every day, 30 to 45 days on average, to sell a used car. If you’ve ever listed a car for sale, taken it down to a consignment lot, and the phone hasn’t started ringing off the hook, you can understand it just takes a little time to sell a car.

Why should you trade your car in?

From a risk standpoint, I think the most important thing to consider is, if you’re gonna go give your car to a person you’ve never met at the Costco parking lot:

1. “Are the funds he or she’s gonna give you verified? Do you have a cashier’s check? Are you sure the money’s good?”
2. If you have a payoff to a lender, if you owe Toyota Motor Credit $3,000, $4,000, $5,000, or any other lender, consider how much risk you have, if the check for some reason isn’t good and you still owe a lender money, so you gotta make sure that gets handled.
3. That kind of releases your liability risk. So now the dealer has it, it’s his responsibility to make sure all the recalls are looked over and the car is safe to sell when he’s ready to sell it.

A lot of reasons to trade a car into a dealer not the least of which is time and money. And by the way, step one for most people when they’re first getting in the market, whether they wanna buy a new or a used car, is to look at their used car or the car they own right now, and which one they plan to trade, and try to figure out what’s it’s worth. The simplest way to do that is if you live in an area where you’ve got a CarMax, stop in. They’ve done a brilliant job of allowing people to come by, get a full appraisal on the car, and they’ll give you an offer good for 10 days on that car. Now you know where the baseline is, that’ll help you tremendously in terms of figuring out whether it’s time to trade, what you’re able to trade for, etcetera.

So, good luck and thank you from vinadvisor.

Written By:

vinadvisor

reblog from http://vinadvisor.net

Auto Remarketing posted a very interesting article today about the how the wholesale vehicle market has changed in the digital age.

The accelerating shift of dealers to online auctions to buy retail and sell wholesale units is not surprising. Offering dealers small and large a simple way to spend less on staff and travel, find more vehicles closer to the dealership and be assured a fair price whether buying retail or selling wholesale units is a win, win proposition. Easy call, right?

So why then when you ask the same dealers about selling cars online do they instantly hold up a STOP sign? Reducing the time spent per sale, increasing the share of local sales and assuring consumers a fair price are (and have always been) the core drivers to improving service retention, repurchase loyalty and dealer reputation. Change is not easy, but resisting it is getting exponentially more expensive.

Here’s what Auto Remarketing had to say…

Soon, Doug Hadden says, the wholesale vehicle market will transition from the majority of cars being sold in the auction to most being sold online.

Hadden, who is the director of strategic dealer sales and services at ADESA, was speaking to dealers at a breakout session during the DealerSocket User Summit in early October.

It should be noted that Hadden believes there won?t ever be a time where there?s not physical auctions. However, online buying and selling in the wholesale market is ramping up.

It used to be that 10 percent of wholesale car sales were online, he said. Now, it?s between 20 percent and 30 percent.

And it ?won?t be long,? Hadden said, before that number is between 40 percent and 60 percent are online.

?The beauty of it is, it?s getting easier,? he said to the dealer attendees. ?But you have to quit fighting it.?

Those dealers that refuse to buy online are likely to be left behind, he said.

Hadden suggested that the best car a dealer can buy online is a low-mileage, off-lease car. And there could be plenty of options in that group next year: Hadden said there will likely be an estimated 4.3 million lease returns in 2017.

?And it?s not slowing down,? he said.

Nor are various providers in the online wholesale market. For instance, ACV Auctions ? a mobile platform that can enable dealers to view, bid and purchase inventory online from selling franchised dealers ? announced in late Septemberit had raised $5 million in venture funding, led by Tribeca Venture Partners, with participation from SoftBank Capital NY, Armory Square Ventures and Rand Capital.

Written By:

vinadvisor