How To Sell Cars Online or Offline (PART 20)
TRANSCRIPT: Let’s talk about some of the pros and cons. First, let’s talk about the cons of the best online tools out there. This is not me saying it. This is Rick Ricart talking about AutoFi from Ricart Automotive. I asked him. I said, “What are the disadvantages of the AutoFi product or of online tools in general?” He said, “Listen,” he said, “The only disadvantage that we see right now with AutoFi is the wet signature requirement,” but of course, he also sees that just like we do as an advantage.
We all see this wet signature requirement as an advantage because it gives the dealer a chance to upsell more F & I products, to meet the customer, to set CSI expectations, to complete a service walk, to set that first service appointment, all the things we talked about.
There are a lot of cons or some of the immature tools that are out there. If they’re missing to-the-penny calculations, for example, this causes the consumer to lose trust immediately. We’ve got to get beyond that.
Make no mistake. I love credit estimators for lead generation like the Black Book estimates your credit score. It’s fantastic for lead generation but it’s not for obtaining financing. That is a problem with some of the immature tools out there.
Another problem is if you require them to go out and find their own financing or even give them that option. You want them to connect with the banks on your website. You want them to log into their own bank on their website. Another con is if you require them to get a trade value elsewhere. It doesn’t make any sense.
What are some of the top advantages of these tools? Again, according to Rick Ricart, one of the top advantages to any of these tools is you’re offering today’s customer what they think they want with respect to buying a vehicle. Of course, only 5%, as Rick says, and 10% in two years as Cox Automotive says, they’re going to buy this way but a whole bunch are going to start this way. Then, they’ll bring in their iPad in the dealership. We’re going to do the hybrid next but you’re giving them a chance to buy the vehicle the way they thing they want to buy. All of these studies say 63%, 75%, all these people are willing to buy online. They’re not all going to buy online but they want to start there.
Of course, there are immediate cost savings. This is another advantage when you do the deal even partially online. We can shorten down the road to the sale, when we can already have the deal desked before they come in. They’ve done the self-desking. Now it’s just F & I. We don’t have to pay as big a commission. We can have product specialists handle this. There are significant savings later when you work with one person in your dealership. That’s what Sonic is finding out with their Sonic-One Experience, what Garff Group is finding out, what Schomp BMW found out years ago, what Walser found out years ago is there are significant savings when we could have someone from beginning to end, one person with our customer.
Folks, I’m sorry if you’re an F & I manager watching this and you think, “My god, is F & I going away?” Yeah, I’m sorry. It is but the great new is is the sales positions are going to pay a whole lot more because they’re going to be a whole lot more professional throughout.
There also CSI advantages with these. When you can do the deal the customer’s way with high-process transparency throughout as we saw offline, we’re going to get better CSI. Finally, the process transparency leads to higher F & I grosses. That’s based on a study referenced in Automotive News. According to one large group, using online buying, they’re seeing higher than expected sales of F & I products with their online sales customers. They also say that F & I sales have been at or above those store’s traditional customer levels. Better back end grosses. We learned from two sources and the Car Biz Today article showing us slightly better front-end grosses. There are better grosses to be had with this.
There’s some additional pros for putting this on your website. One of that is that people are selling cars online right now. Okay, you can either join them and be in control of your customer or you can wait for Chase or AutoGravity to start sending you one of their customers and letting that customer choose dealership in advance.
The cost risks are virtually nothing with the newest tools like AutoFi. Again, you’re not developing a lot of stuff. These things just a bit of code goes on your website. They work with your website company. All the tools do this. There’s no more bleeding edge. You’re not developing stuff.