If UK car retailers really are intent on embracing the internet with the enthusiasm of their US counterparts, they ought to know that web-site selling could turn out to be something of a double- edged sword. Using their several years’ lead, the Americans have brought not only sophistication but extraordinary openness into their web-site presentations.
Amid howls of anguish from a few Luddite dealers who saw catastrophe ahead unless the customer was kept completely in the dark (‘Keep the customer barefoot and pregnant’), the dotcom pioneers clearly decided that the emergence of this new medium should be celebrated with a revolutionary change in dealer/customer relations. They resolved that at the same time as offering the customer the
facility of ‘research before visit’ perhaps the dealer’s interests might best be served by lifting the veil of secrecy over such items as wholesale and trade guide prices.
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So now the browser can not only select and price his targeted new car; with a few clicks of the mouse he can also calculate the value of his trade-in and even find out the dealer profit. This radical change is fast
becoming the norm and shows no signs of being abandoned. Indeed, the forthcoming landmark web site from the North American Dealers’ Association will also adopt this format. Truly a fundamental and, perhaps to British eyes too, risky innovation.
As an experiment I logged into a medium-size West Coast dealer site, requesting a price for a new top-of-the-range Chrysler 300M and offering my wife’s 1992 BMW 325i in trade. By clicking on ‘pricing’, within a few seconds I was informed that the Chrysler’s MSRP is $29,715 and that the dealer net is $27,291. No equivocation whatsoever. Perhaps I should say here that a few dealers go so far as to disclose overrides, bonuses and the like.
Kelley’s Blue Book is the American equivalent of Glass’s Guide. Most web sites incorporate the whole Blue Book for the information of browsers (automatically updated monthly by subscription), and one is
taken through a straightforward process to arrive at the value of one’s car. Please excuse the detail here, but it is useful to understand what is available at the click of a mouse.
Normal mileage for a 1992 BMW 325i is 88,000, giving a base price of $6,750 wholesale and $8,110 retail. Entering the true mileage of the BMW in question (a mere 28,000 miles) raises those numbers to $9,284 and $11,124 respectively. Further adjustments are made for the various features and accessories – manual transmission rather than automatic, air conditioning, sunroof, etc. etc. – and the final modified figure is $11,919 wholesale and $14,219 retail. (An interesting sidelight to this process is that Blue Book values are normally accepted faithfully, not always so, I understand, with Glass’s Guide).
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This then becomes the basis for negotiation, customarily by telephone but occasionally by e-mail, taking into account the trade-in’s condition, etc, with the web-site salesman going through a comprehensive list of questions to ensure no misunderstanding. A price is offered subject to the condition being as described. Only when the trade-in arrives at the dealer’s premises does the traditional process take over. It is then examined by the company’s buyer/appraiser to confirm condition being as described.
The unique feature of this discussion is that, with all the information he has gleaned, the customer can easily assess the dealer’s gross profit. Indeed, it is not unusual for the salesman to divulge the amount of his commission during the discussion.
There are several other notable features worthy of mention. Some sites offer comparison tables between two or more cars. The customer may be undecided whether to buy, say, a Chevy Malibu or a Ford Taurus. He can run up a chart, comparing price, performance, features, even forecast resale price. As further evidence of this latter-day candour, GM’s web-site provides details of all competitive makes.
Several sites even give the browser the opportunity of ‘building’ the vehicle he wants. He clicks on for a photograph of the vehicle, changes the colour to his own wishes, adds features such as custom wheels, sunroof, etc., and, hey presto, there is the car to his exact specification. It did not take long for one enterprising company – EyeVelocity – to establish the necessary software for this process, claiming substantial increases in accessory sales in pilot schemes.
If pricing is vital, the customer can buy on ‘ability to pay’, logging in deposit and monthly payment he can afford, and being presented with a list of suitable makes and models. Or, having selected the car, he can link to a page to calculate the monthly payments.
To a Brit steeped in discreet business practices, it is remarkable to observe the customer being taken so completely into the dealer’s confidence, even recognising that access to dealer net prices is easier in the States than in Britain. The internet revolution must take credit for breaking new boundaries in disclosure.
American dealers are also keenly aware of the need to make their web sites interesting. If they are fortunate enough to be located in a popular tourist or historic area then they provide a page showing the various attractions. It may be that the dealership has an interesting story to tell of its own background, of the civic and charitable work it does, of individual achievements of its executives and employees.
No site can be complete without a location map, showing ‘how to find us’ details, and few sites are without a ‘testimonials’ page. One Idaho dealer presents no fewer than 150 letters of appreciation, enough perhaps to convince the most apprehensive buyer.
It may well be that Britain is not yet ready for such sophistication, such detail. The average British car buyer may not yet be quite so internet-savvy. So for the immediate future the time-honoured reticence may prevail, but the trend is clear.
One last word. Success ratio is in direct relation to response time. In preparing this article I accessed three American web sites, all at 7 a.m. local time. One detailed response came within half-an-hour, all within two hours (the latter two sent a formal acknowledgment within the hour). Bells and whistles are dispensable, quick response is not.
The relevance of this is underscored by the importance of having a dedicated web-site sales team, and this tends not to be a problem in the US where dealers employ more staff. For the British dealer with just a few salesmen this is not quite so easy, especially in the early days when incoming internet inquiries are few and far between.
