• Sean Lanham

Dealerships Are Done (Part 2)

Updated: Jun 12, 2020

Previously we discussed the normal headaches we face at a traditional dealership plus those added by COVID-19. With that taste still fresh in our mouths lets look at the alternatives and how our shopping experiences might be changing for good.

Online car shopping has been around for a few years but people weren't eager to make large purchases through a screen. Most millenials have grown up with click and go shopping so why should buying a car be any diffent. Services like Carvana and Carmax Curbside are making the most of that. It rids the experience of all the negatives we associate with the dealership like being passed off to 4 "managers", fighting to get the right price, and waiting around for hours. Still, online car buying hasn't taken off quite as expected. Until now

Out of Necessity

Both dealers and consumers have been forced to adopt more usage of e-commerce because of current restrictions. While franchise dealerships struggled to optimize these services, Tesla and Carmax have been thriving. Carvana has begun picking up steam as well. Dealers are still living in the past, relying on closing a deal over cofee and a hand shake while parading upgraded models and add-on service pamphlets. "If you didn't get the customer on the lot and in the car, your ability to close the deal was greatly compromised," said Karl Brauer, senior director of content and executive publisher for Cox Automotive. With my recent experience buying a vehicle 100% through a dealer, it is apparent that they need to change that thought and do it quickly.

Carmax continues to refine their personalized car buying experience and it has shown in their lack of struggle through COVID. Only 30% of their stores were forces to closed during the pandemic while most franchise dealers grinded to an abrupt halt. With the new normal almost in sight, it is clear that face to face interaction may take a back seat to automated, digital, and touchless alternatives. This has introduced a greater population of consumers to the world of online car buying and shortened the curve to adoption by the masses. Will buying a vehicle via an app be the new norm?

The Better Buying Experience

I purchased my dream car via the quasi-traditional way but later this year I plan on purchasing 3 additional vehicles and I contemplate the best way to do this. I need to purchase a new fleet truck for Ravishing Rides' detailing services. I need a new family hauler and I plan on adding a new BMW 2 wheeled terror to the garage, replacing my Harley. With Hertz Rental going bankrupt, I may find a good deal on a work truck through their process which will be somewhat traditional. The family hauler, most likely a small SUV, would be an excellent prospect for Carvana or Carmax.

Theres one big reason I like Carvana. I can make an instant purchase without dealing with anyone. I am a people person but I really don't want to be held hostage to close a deal. Carvana gives you financing options through them, your down payment (if required) on all the vehicles they offer and a live payment calculator. I can browse a model, determine how much to put down, determine my payments by adjusting my terms and even see how that impact my interest rates. After that, it seems like its click click and wait for the truck to show up at my door. Literally done from a phone in a few minutes. If I dont like the vehicle when it arrives, I can send it back and try again.

Now there have ben reports of poor condition cars arriving at customers homes but Carvana customer service has pretty good ratings and they do what they can to remedy the situation. Much like when your Amazon package comes banged up and reach out to the seller. They send you another one. Thats simplifying it, but that how the process works.

The Exception

Oddly, I dont want to buy a motorcyle online or sight unseen. Not because I need to see it and feel it but because theres an atmosphere of being in the bike shop. If you have never been to a Harley Davidson dealer, you should just experience it. While some still have the salesman stigma, most understand you are here for a purpose and dont need much selling. They let you enjoy the environment and my Harley buying process from walking through the door and riding out the garage was a 2 hour celebration with fanfare and prizes (Poker Run through the departments).

I am certain I will take the short ride to my local BMW Motorad dealer for that purchase. Not only for the atmosphere but also the accessories you cant help but purchase with a new bike. The instant gratification of grabbing that matching jacket, helmet, gloves, and boots for your new bike. Adding in some performance and styling parts and then theres one more exclusive feeling of the bike shop. If you buy a brand new bike, you often have the opportunity to unbox it. Yes, imported bikes, like the 2020 BMW S 1000RR I am considering, arrive at the dealer in shipping crates. You can be the first to unbox the largest present you ever received. Its jsut an amazing feeling.

The New Normal

Touchless auto service will become the new norm if I had to take a guess. It was already on the rise but sometimes, as a society, we need a push to adopt new things. I still remember my mother telling me DVDs wont last becuase people have so many VHS tapes. "What do they think we are going to do? Throw out hundreds of tapes and buy these flemsy CDs." To which I replied, when was the last time you could physically buy a cassette tape of 8 Track. Now nearly anyone buys physical media if its even an option. The auto industry will greatly adjust due to COVID.

Carvana was a leading pioneer on that front. Their car vending machines were touchless long before it became a need. Next maintenance service, test drives, and trades will be fully automated and people will eventually prefer that option. Much like mobile detailing. No need to leave your home or interupt your day to wait on a service. Some times change is good.

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