If you watch TV even a little bit, you’ve likely seen commercials for at least one of the online car buying services. Whether it’s Carvana, Vroom, or Carmax, what was once a tiny part of the market is quickly growing into a significant part of the sector.
It’s easy to understand why from a user standpoint. Going in person to a local dealer can be extremely intimidating to many and a poor experience for almost everyone. Carvana started in 2012 and has significantly revolutionized how people buy—and now sell—used vehicles.
Before them, getting a quote online to sell your vehicle was almost impossible. The status quo was to find a car you like and then take your current vehicle there to trade it in with the hopes that they would “give” you a decent deal.
There were two pretty major flaws with this process.
The first and most impactful is that even seasoned “negotiators” have little leverage in this scenario. With no other reference price, all you have to go on is what the dealer says. Yes, I’m sure your dad, brother, or uncle is a true genius at buying/selling cars and loves to talk about it. That said, in all likelihood, they probably still won’t get you the best deal possible. This is because you only shopped at one location, and the dealer already knows you want to buy something on their lot. Sure, you can walk away, but then you lose something you want, and they know that. Dealers are not stupid .
Additionally, unless you are trading in a vehicle that the dealer can sell (such as trading in a Toyota for another Toyota), the dealer will send it to auction. That means they will not make any additional money on post-sale stuff like financing for that car and are unwilling to invest more than an auction sale will provide.
The second major issue with the classic quoting process is that the dealers are often very aggressive. Once you’re on the lot and give them your details, you can look forward to several phone calls and emails a day for up to two months!
The dealers are in this to make money, and no one can fault them for that, but the rules of customer engagement are changing, and so must dealers if they want to survive. The externalities of Amazon’s customer-centric experience are wide-reaching and severe.
With the unmet needs of the average consumer in mind, Carvana kicked off the era of removing the in-person experience with a smooth and convenient way to buy used cars. Within just 8 years, they are one of the largest dealers in the country and will likely sell more than 300,000 cars in 2021. Customers value this experience even though Carvana’s cars aren’t often the cheapest.
A quick skim through the North American Dealers Association (NADA) market report makes it clear that traditional brick-and-mortar dealerships are scared. How do they respond to this new online threat?
The obvious answer is to establish online operations themselves, which they did.
You can now buy many cars from local dealers, at least somewhat online. This means you can get through 80% of the steps virtually and then complete some final signatures in person, minimizing time with salespeople.
Seems like that should be a problem solved!
Unfortunately, it’s not so simple. Most traditional dealers took what they were doing in person and just threw it into a web platform. Online-first dealers have come into the industry with an ear to the customer and how they can improve the experience. Brick and mortars have workflows that “work” which now involve online quotes that barrage you with sales calls and emails just like you would expect in person.
I recently requested a quote online for a local dealer and got 6 emails in 20 minutes and 5 phone calls that day.
Traditional dealers have to understand that adapting doesn’t just mean going online; it’s also a process that includes putting the customer first. Until this happens, the local dealers will never be able to truly compete with the major platforms.
If you can find an actual Toyota dealer near you to buy your used Toyota, they can often pay more than anyone else.
So, how can you get a better user experience while still getting quotes from all your available options? That’s where Topmarq comes in.
Instead of searching for all the different online services or only quoting one, Topmarq allows you to get quotes from all the primary dealers at once without being constantly called afterward. With no pressure to sell, you can comfortably see what your vehicle is worth and decide at your leisure.
The benefits of this are two-fold. You can see all your options regardless of where you buy your next vehicle. And traditional dealers showcase their offers next to other online dealers, which often results in a higher quote than elsewhere.
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