vAuto chief to finance folks: E-commerce is coming
Dale Pollak, founder of vAuto Inc., said e-commerce is coming to auto retailing and auto finance whether dealers like it or not -- and in his opinion most dealers don't.
"A lot of us made a lot of money for a long time capitalizing on the lack of transparency," Pollak said.
Pollak said most dealers meet the concept of e-commerce -- and especially the pricing transparency that comes with it -- with a "dour" response.
"It's hard for dealers to embrace," Pollak said, in a presentation to the American Financial Services Association here on Friday. VAuto, of Oak Brook, Ill., is a software provider that specializes in used-vehicle inventory management.
But e-commerce and pricing transparency are unavoidable, according to Pollak.
"Gen Y has expressed a preference for fewer personal, physical touchpoints with the dealer," he said.
Instead, younger buyers would prefer to do as much shopping, negotiating and getting financed as possible online, Pollak said.
"For dealers, this implies a loss of control, a loss of margins. ... It goes to the very heart of their psyche," Pollak said.
AutoTrader.com, a third-party auto classified site, purchased vAuto in 2010. Pollak, a former Chicago area Cadillac-GMC dealer, stayed to manage the company. AutoTrader.com is majority-owned by Cox Enterprises Inc., which also owns Manheim, the nation's largest wholesale auto auction company.
At the same time the physical dealership is becoming less important to up-and-coming generations, automakers are increasing their demands for uniform, new and better dealerships, he said.
To any automaker executives in the audience, Pollak said: "You should be giving them incentives to reduce the cost of physical operations, not increase it, because it will be unsustainable for them in the future."
Now, that's a part of Pollak's message dealers might endorse. c
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