If you watch TV even a little bit, you’ve likely seen the commercials for at least one of the online car buying services. Whether it’s Carvana, Vroom, or the reimagined digital-first Carmax, what was once a tiny part of the market is quickly growing into a major 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, has played a major part in revolutionizing how people buy - and now sell - used vehicles.
Before them, it was almost impossible to get a quote online to sell your vehicle . The status quo was to find a vehicle you like somewhere 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 the most seasoned ‘negotiators’ have very little leverage in this scenario. With no other reference price, all you have to go on is what the dealer says. Yes, yes I’m sure your dad or brother or uncle is the 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 that 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 actually sell - eg. trading in a Toyota for another Toyota - they are just going to send it to auction. That means they will not make any additional money on post sale stuff like financing for that car and will not be willing to invest more than what they think they can get at auction.
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 2 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 they 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. Clearly, customers value this experience despite the fact that 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 go online themselves. And so they did.
You can now buy many cars from local dealers at least somewhat online. Meaning you can get through ~80% of the steps virtually and then just complete some final signatures in person, minimizing time with salespeople.
Seems like that should be problem solved!
Unfortunately, it’s not so simple. You see, most of the traditional dealers took exactly 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 the span of 20 minutes and 5 phone calls that day.
Until traditional dealers start to understand that adapting doesn’t just mean going online, it means putting the customer first, they will never be able to truly compete with the other major platforms.
The thing is, 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 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 major dealers at once without being called constantly once you do. 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 get to see what all your options are regardless of where you buy your next vehicle from, and traditional dealers get to showcase their offers next to other online dealers which often results in a higher offer than you could have gotten anywhere else.