In retrospect, car buying hasn’t changed all that much; you still select the car you want, create a budget and negotiate the deal with the car dealers—what has changed is the market and the innovations assisting consumers in the car buying process. And it’s not something to simply overlook.
Crisis to Innovations
Since the recession in 2007, the auto industry has been trying to avoid another bust, while consumers were trying to avoid taking the bus. Like I mentioned, the attitude toward car purchasing hasn’t changed, we all still want the best deal, but the innovations in which we can get the best deals have. Car buyers are no longer blind when they negotiate with dealers. Potential car buyers can now easily use online resources such as Unhaggle.com to uncover invoice prices, a negotiating strategy that wasn’t available with ease a decade ago.
To some the automotive industry’s financial crisis was a horrible scenario; many lost their jobs. The race to the bottom, a term often used in labour, has affected the auto industry’s business. Cutting wages and workforce, the industry is just resurfacing and returning to the norm—and it is now the consumers that have the advantage over the market. The teetering game of boom and bust is a scary one to play for the manufacturers and dealers. This new system of marketing, revealing the hands to the car buyers right off the bat to promote their brand, has indeed changed the market. Dealers are no longer competing with the car buyers, rather other car dealers. It all comes down to the fairest price for the consumer.
Social Media, E-contracting and Technology’s Effect on the Market
Take their word on it. That was what consumers had to do before social network or the Internet. Car manufacturers and dealerships’ promotions would be advertised and consumers would just have to take their word on it. It wasn’t always easy to get an honest opinion—I mean, you can go to your supermarket parking lot and find someone who has a car you have considered buying and ask for his or her thoughts, but that’s intrusive.
Social media changed the way we consume information and communicate with a global audience, especially when it comes to big purchases. Sure, we can go to the brand’s website and walk in to speak with the dealers, but how unbiased is the conversation. Social media provides a forum for every-day people to voice his or her opinions. Was it a good buy? Is it worth the price? Was that dealership honest, reliable and helpful? These are all questions that were not fully accessible to everyday people a decade ago.
With smartphones and other mobile devices, customers can send and retrieve data instantly. Brands and dealerships now have to combat bad publicity on a daily bases, which is a great thing, that enforces the honour system in an industry not always known for it. This has ultimately changed the way business is handled.
For dealers, speaking with potential buyers in the showroom has changed significantly. Corresponding with the customers can now be done through emailing or other forms of online messaging. This will leave message history, ensuring honesty and limiting the chance for dealers’ to bring the customers in to only pull the bait and switch tactic. Customers today are utilizing the Internet fully to get the upper hand and the best deal possible. Although it may still sometime seem like a gamble, the odds are in their favour.
The innovation of e-contracting has added another positive element to the car buying experience. This paperless method of completing a deal is decreasing the sometime frustrating process of buying a car. E-contracting has been around for sometime now, but customers at last have found the confidence to use it. A decade ago, there was a cynical attitude towards such security-sensitive platforms like online banking and shopping. Coupled with the efficiency and the recession, in 2013 this method of filling out a contract is the norm.
Accepting the customers’ demand, dealerships have transitioned to the e-contracting method. It has reduced errors and sped up fund transactions and there is no signs that it will disappear, in fact, businesses have grown ever more dependent on it.
The Lease of Our Worries
What was once considered an awful investment strategy is now gaining popularity. In 2013, 18% of cars driven by Canadian are leased, an increase of 3% from the year before. For budgetary reasons, fewer Canadians can happily fit in the invoice price of a vehicle into their budget let alone the MSRP. Balancing all the other bills and payments, car buyers are choosing to be leasers, which will cause a dramatic shift in the market.
Leasing doesn’t always produce the greatest profit and dealerships often shun it as an option. Without any finance reserves or warranties, dealers aren’t able to get the premium for a lease car. But that doesn’t mean the dealers can’t continue business with the customer. After all, leasing allows the customer to have new car every few years, thus creating loyalty.
As the market continues to shift and car buyers continue to balance budget and research prices, two things will happen: car buyers will begin receiving discounts or leases will be promoted more earnestly.
Yes, from the days where people bartered to now, customers have been seeking the best deals. Never had it been easier to do so. Although car dealerships aren’t exactly giving their products away, customers are in more control than ever. They are now able to research with unhaggle.com and effectively negotiate in their own manner to get the car of their choice with more options.
