Internet habits are altering the auto sales business

story by Ryan Saylor
rsaylor@thecitywire.com

The persistent car salesman trying to put a customer behind the wheel of a car they were not looking for is likely a relic of the past thanks to the Internet.

According to Morgan Pierce, sales manager at Smith Auto Group in Fort Smith and Northwest Arkansas, upward of 95% of the customers who come to his dealerships have already done their research before ever stepping on the car lot.

Due to the large numbers of customers going online first, Pierce said Smith Auto has invested heavily in online sales.

“The last couple of years, it’s been really full blown with videos and pictures. We get those in as soon as we get (the cars) off the truck. Get pictures and videos and put them online.”

The days of money hungry sales people waiting to pounce on the next customer have been replaced by sales people hoping for a lead, Pierce said.

“We have people who answer Internet leads and distribute to sales people. It’s its own company, almost.”

As a result, the market for many local dealerships has expanded beyond Arkansas, according to John Stanley, an Internet sales manager with Crain Automotive’s Ford dealership in Little Rock.

“(The Internet) is a venue that someone can reach out far beyond their driving radius, without a doubt.”

Pierce said he has opened Smith Auto’s market from coast-to-coast with potential customers finding the car they want either through the dealership’s own website or listings on GM.com or Cars.com.

“I talk about our out-of-town buyers, that’s still a small percentage. But the Internet has provided a way to do that. Without the Internet, we wouldn’t be able to sell in Oregon, Florida or California, and we’ve sold in all of those states. It’s a great tool, but you’ve got to make sure your site looks good and have the right people.”

Stanley said it comes down to people “knowing what they want,” and if that means buying a particular vehicle from a dealer in a state a thousand or more miles away, so be it. He said it is true of younger to middle age buyers, though older customers still shop traditionally.

“Your older demographic will usually do (business) face-to-face,” he said. “They want to put their hands on the vehicle. They want a more personal experience.”

Pierce said the age of smart phones and the Internet has changed everything though, even for local buyers.

“(Deals are done) all over the phone. Or through texts. We’ve done it by texts. …E-mail and texts, social media have just dominated everything.”

And while dealerships have found a large marketplace online, it is also meeting a lot more demand, especially in the used car market. Stanley said private sellers using eBay Motors and Craigslist have led his company to make deals that some could consider drastic.

“A lot of times, yes, we have to be very flexible in pricing and what we are giving on trade-ins. And yes, selling at a loss sometimes, especially to a repeat customer,” he said. “(Owner) Larry Crain is good at going above and beyond to keep them a client for the future.”

Even though Stanley admits private sellers have posed added competitive challenges for Crain Automotive, he believes customers seeking a quality used or new car will still make a traditional dealership the go-to destination.

“We do indeed do an inspection. And yes, we do a pre-inspection, even on new vehicles, to ensure everything is as it should be. We make sure the vehicle is up to par,” he said. “Buying from an individual, you don’t really have any guarantee. There’s no warrantee. That individual doesn’t own a dealership and has no means to guarantee. You can do a CarFax on it, but it just tells you if it’s been in previous wrecks or if titles are reconditioned or salvaged. But vehicles are unpredictable. When you deal with a dealer, you have more peace of mind with protection in the future.”

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Sites like eBay Motors are typically only a good idea when searching for a specialty vehicle, according to Pierce of Smith Auto.

“We have a couple of people here that will (post our inventory to eBay) on specialty cars,” he said. “On the specialty cars, it can be (a good resource) for certain cars that people are looking for that you don’t just see everyday. When a 2010 Corvette comes up with 8,000 miles, that’s a specialty car. That’s when you get calls from Michigan and New York. And we’ve sold cars up there, too.”

Pierce said as the Internet continues to dominate the automotive marketplace, his team will remain on their toes.

“You really have to have people that know the product,” he said. “The worst thing is for the customer to know more about the cars than you do. And people can go online and find out anything from rebates to the engine to what bells and whistles are on it.”

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