Dealers and Sales Staff,

Much has been made in recent years about the "Transparency movement" and it's effect on the market.  Consumers claim a re-birth while dealers maintain that it's led to their margins slipping year after year.  Both are certainly right that the market has changed and at the expense of the dealer, but is transparency really at fault?

Honestly, transparency likely isn't to blame, it's the over emphasis on price and the vacancy of real value.  The websites offered it, the consumers used it, and when it was too late the dealers finally gave into it.  At first, it started with just wanting to make a few extra sales.  A few price drops here or there were innocent enough and more of an exception to the rule, or so you told yourself.  What you didn't realize is that "Everyone was doing it".  Now dealers find their margins, and leverage, have been diminished and that they now live in a world of pure volume.  To make matters worse the tidal wave didn't break at just emphasizing price, websites pushing this new definition of transparency caused a departure from any true measure of determining the value of a vehicle.  Take for example the time that a vehicle has been listed.  The longer it's been shown to be posted the less a shopper assumes and is told they should pay.  But the car isn't worth what someone else wouldn't pay for it in a certain amount of time, it's worth what they will pay to have it now.  Transparency, as it's presently being defined, hasn't just lead to more information so the consumer may better determine a fair purchase price, it has also lead to the introduction of distracting factors that can keep that same consumer from ever properly defining a fair price.  What these websites always fail to tell their users is that the factors they claim represent the value of a vehicle better than their competition can also have absolutely nothing to do with it.  Properly educating the consumer, being transparent if you will, requires they know when something matters AND when it doesn't.   

So, margins have faded and transparency is through the roof, car buying for the consumer is better than ever right?  HA!  Consumers are complaining as much as they ever have about car buying and no one has put 2 + 2 together= Price doesn't equal a positive experience!!  In fact, several studies have shown that when car buyers shopped multiple dealers and chose the lowest price offered, their overall experience suffered compared to those who chose to buy from someone offering a vehicle for slightly more than a competitor.  The buyers who chose the lowest price, not surprisingly, said that price was very important whereas the buyers who chose a higher price mentioned other factors influencing their decision such as:  How they were treated, what was in stock, or other incentives.  The real kicker?  More people (50%-60%) of buyers did not choose the lowest price!  

Now that we have determined transparency and an emphasis on price are misleading and bad for dealers, what next?  Well, we never concluded that!  The consumer will always want more information than they are used to and price will likely never be of little concern, so transparency and price are not bad words.  What is bad is letting topics like transparency and price be defined on your behalf.  As technology advances the opportunity for the definition of transparency to spiral out of control, and the number of people ready to cash in on that spiral, will only increase.  Society is being groomed by Amazon and Uber and eventually, dealers will have to embrace the fact that the control over transparency and information is on a decline.  The question is, would you prefer that decline be a controlled descent or a rapid loss of cabin pressure?    

One party that knows too much about the other isn't a recipe for success, it's a recipe for one side getting more creative to restore the balance, and as we see in consumer surveys that isn't making anything better for anyone.  Hitch believes transparency can be a practice dealers embrace but it's going to require it be redefined as something that exists on both sides of the transaction.  Moving forward, dealers must take a more active role to recoup what it means to be transparent because by now it should be clear that leaving it up to someone else is a losing proposition.