There is a reason Tesla is more valuable than GM, Ford, and Chrysler…combined. In only 10 years, Tesla has created vehicles and a buying experience leading the future. There isn’t a dealer sales process to haggle with and financing is straightforward. You can order your car how you want it with financing terms presented transparently. Why did this take so long?
You hear a lot about disruption in the markets today and see the rise of giants like Amazon and the fall of Sears, or Netflix in everyone’s home and the demise of Blockbuster. Change is hard for legacy providers with an old guard management that doesn’t want to rock the boat holding on tightly to a short-term view and near-term bonuses. But, thankfully, they are not the ones controlling products or markets. The internet has changed everything empowering the customer and providing opportunities to new companies seeing an opportunity to deliver the experience customers want.
Buying a car still remains painful too often and for too many, especially those without good credit. But there are new providers coming into the market delivering a better customer experience. There are 40 million used cars sold every year in the US. 10 million of those are sold by the owner, and 30 million sold through dealers, of which, about half are smaller independent dealers. A few years back, a buyer would visit 4 or more dealers before selecting a vehicle, today it's about 1. All of the leg work and kicking tires is done online today clicking through the shopping process. The average buyer spends about 16 hours online researching the vehicle and financing options. But who would buy a used car online without a test drive and have it show up at their front door you might ask? The solution to this problem is enabling the buyer to drive the car for a few days and giving them the option to return it if the condition wasn’t what they expected, or if their tools don’t fit in the trunk. Much better than a brief test drive around the block at the dealer, wouldn’t you agree? A test drive with a salesman riding with you when all your thinking about is what will the payments be, and other financial considerations, or should I try to parallel park…isn’t ideal.
Who has the time or wants to spend 4+ hours at a dealer in an unpleasant experience? It should be an exciting day that you look forward to, not consuming a Saturday playing the negotiating game.
The combination of being able to buy online and having the vehicle delivered is changing the way the game can be played. Finally, in the customer’s favor. Buying a vehicle online brings the transparency expected when making a purchase decision, and for most people, a car is a major purchase. There is no reason to negotiate the price of a car in today’s world. Why should two buyers pay different amounts for the same product? As demographics shift and Gen Y and Z make up more and more of car purchases, you can imagine how they will respond to an obfuscated sales process with their mobile phone in hand.
No doubt there are specialty cars, classics, and hot rods that you will want to see before you buy, and the seller won’t likely be cool with letting the car go with a return or exchange option. However, for the majority of used vehicles sold, there is a lot of data available to remove the risk that the car doesn’t have the options you are looking for or the data on its prior history.
The added benefit of an online process if you don’t have great credit is you can handle the entire transaction without the feeling that you owe the dealer something for getting you financed. You don’t. Dealers aren’t taking the risk, a lender is. Rather than filling out an application and explaining your credit situation in person at the dealer, the advantages of completing the transaction online will save you more than time and money.