By Paul Sims, Senior Vice-President, Digital Automotive and National Accounts
Growing up, I remember the used car dealerships on auto row. Each had their signature inflatable air dancers, inflatable gorillas and large red “SALE” stickers to attract customers.
This image persists in the minds of many Americans when they think of the used car buying experience, and consumers don’t feel things have improved much, with 61% saying the car buying experience is the same or worse than the last time they purchased.
In reality, the modern used car dealer has evolved tremendously in the retail experience. Many dealerships from Asbury to Group1 to CarMax, have put in place digital retailing technology to allow consumers the superior experience of being able to go through the purchase process from the dealership in whatever way they want – online, offline, or a mixture of the two.
Given the demands of today’s consumer and the intense competition among dealers, it’s important for dealers, especially used car dealers, to dispel the outdated images of the industry to better position themselves in the minds of today’s car buyer.
Two ways dealers can see to this is by utilizing technology to make themselves more transparent and more accessible to potential car buyers; and integrating their F&I department into the front end of the sales process.
Embrace Technology or Get Left Behind
Let’s face it, nowadays, most customers already know what they want, and how much their preferred vehicle, new or used, will cost, before they walk into the dealership. The age of the informed customer is here, and the level of knowledge is only in increasing. The only way to win is to harness the power of technology to put your dealership in the best position to align with today's shoppers' habits.
According to Assurant’s Inside the Automotive Customer Experience report, 85% - 90% of vehicle shoppers begin with online research, and 63% of their total time spent buying the vehicle - almost 9 hours - is spent online. Those customers are used to having a wealth of information and options at their fingertips.
There is more transparency than ever before in the used car transaction, with Carfax.com and Autocheck.com providing vehicle histories, and market pricing information available from KBB, CarGurus and other with a click of the mouse.
Having accurate and comprehensive information available for shoppers on your website and your lot, builds trust and is the first step in removing the outdated images of a car salesman and making the sale.
Include F&I in the Digital Shopping Process
According to the Inside the Automotive Customer Experience, 52% of respondents recall being offered a VSC, and 40% of those respondents actually purchased one. While vehicle sales are down slightly, used vehicle F&I attachment is up 2.7% according to NADA. This is good news for dealers, but what can you do to outpace the competition and grow above the norm?
Almost 50% of today’s car buyers say they’re interested in learning about F&I products from you online before they’re in the F&I office. By educating today’s consumers on the value a VSC brings to a used vehicle during their shopping process, and not waiting until the F&I office, you’ll be meeting today’s shoppers where they want to be and increasing the chance of making a sale. In fact, from what we’ve seen with several dealers who have made the moves necessary to do digital retailing correctly, their F&I attachment increased as well as their PVR.
But that’s not a given. Just like in the F&I office and the showroom, you’re not likely to sell a VSC if you have outdated and inaccurate product information online in your digital shopping experience, let alone the compliance headaches you open yourself up to. But succeeding with these tools isn’t just about accurate product info, you also need the proper F&I processes for handling the consumer that has been learning about the products and shopping your dealership online.
The opportunity for dealers to succeed with today’s used car shoppers and today’s technologies exists, but it requires understanding and leveraging the technological tools at your disposal and integrating the F&I office further into the process to drive increased revenue and the profits that go with it.