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July 18, 201 1
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Buyers Today Know More, Have Less By Ted Craig
Today’s used-car shopper comes to the dealership with much more information than ever before. And a lot less money. Robert Vaughan, owner of Vaughan Motor Car Co. in Columbus, Ohio, said years of a depressed economy in the state have left buyers without enough money for a traditional down payment. But they still want to buy what they want with the money they have, Vaughan said. That’s because the downturn also made dealers more willing to share information with the public in an attempt to encourage sales. Consumers today can find out every detail of a car from its individual history to average pricing data. “During the recession, you lost control of the sale,” said vAuto founder Dale Pollak to attendees at the recent National Automotive Finance Association conference.
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That means dealers must find a new way to do business. Steve Hall, president of Dallas-based Driversselect, recommends not fighting to regain that control. “You really have to engage the customer,” Hall said. Dealers have lost power over pricing, Hall said, but they still control the buying experience. Consumers will pay more for a process that saves them time, he said. This helps the store’s bottom line, too. Hall said he needs fewer salespeople to sell more cars because he lets the consumers handle more of the transaction online. Another positive is an increased buyer base. “If it’s disclosed and transparent and priced right, there’s a buyer for every car,” Hall said. This helps today when inventory proves so hard to find. For buy-here, pay-here dealers, the sale is only the start of the relationship. That’s changed today as well. Ingram Walters, owner of Griffin Quick Credit in Monroe, N.C., finds his collections staff working more as career counselors these days. He tries to find jobs for his buy-here, pay-here customers rather than repossess their cars. That’s a big change from a few years ago when Walters maintained a strict collections policy. Today, there’s a lot more leniency. “To a fault, we try to work with them,” he said.
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Capital One Sees Pent-Up Auto Demand (Kevin Borgmann is the president of Capital One Auto Finance.) UCN: How is your business doing these days? Borgmann: Our business has a lot of momentum right now. We have a Diamond program where we build deep relationships with dealers. On the credit side, our losses have come down and are at near-record lows. UCN: How does that compare to Capital One’s other lines? Borgmann: Every market is different in terms of when the recession influenced it. The recession occurred a little earlier for the auto finance segment and it has emerged a little faster, as well. UCN: What do you see as the driver of that? Borgmann: In banking in general, consumers are being relatively cautious. In some ways, auto is a little different because cars wear out and people need to get new ones. The fleet of cars has aged fairly substantially as people have put off new-car purchases. There’s some pretty substantial pent-up demand that we’re starting to see now. Continued on page 8
IN THIS ISSUE • Independent dealers buy, sell more units online. – Page 3
• Wholesale prices moderate slightly, but remain high. – Page 6
• Biggest theft threats come from within. – Page 5
• Association names scholarship winners. – Page 16
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