Microsoft and the dot-coms proclaim an online revolution is under way in how cars are purchased and distributed. Will the Internet revolutionize the way consumers go about their auto purchases? Or is the rhetoric of revolution merely a veil for the digital giants to enter the auto industry?
Some factors of the auto industry are not affected as much by advances in digital technology: local distribution and service needs, the purchase process and the complex nature of the automobile as a product. Entering the industry, Microsoft and the dot-coms find themselves in a strange land.
An auto purchase is more complex than a computer purchase. An auto is moving metal imagery of style, power and the economic order. That transforms the auto into a type of mechanical extension of clothing. It communicates something of what the driver wants to say about himself or herself.
For many buyers, the automobile is the largest purchase they make, and it encompasses a significant percentage of monthly income. Customers often find a conflict between what they want and what they need. They find they cannot afford the payments on a particular car.
At that point, they must either change the material core of their decision and get a less expensive car or change aspects of their budget to pay for the car. Often, there is an awkward balancing of scales between what they can afford and how they want to be seen.
Complicating the picture is the actuarial minefield of lending requirements the customer must traverse to obtain funds for the purchase. The decision of what car to buy is not completely in the hands of the consumer, and many times it ends in rejection. Customer reaction has been to kill the messenger by blaming the dealer.
A great auto dealer is a master at recognizing those difficult processes and guiding the customer to a path that works. The words 'auto agent' more accurately describe today's top salespeople; services they perform are valuable and real.
Computers have improved the automobile purchase process. Disclosure of invoice information has prevented unscrupulous dealers from gouging customers. Rather than trying to convince customers a higher price is a good price - the con game - auto agents work to help customers meet their needs for a fair price.
Consumers are not being served accurately by online services. They have been misinformed and are being misinformed. What the services save consumers in money, they cost them in time.
Customers constantly are quoted prices from buyers' guides without being given the retail costs of doing business. Misinformation adds to distrust of auto dealers because the online services have a built-in villain for the customer not being able to obtain the price in the buying guides. There is no accountability for inaccuracy. Is the buyer's guide serving the customer by quoting a price no retailer will meet? It simply sends the customer around the local market armed with a printout he or she believes is the truth. It causes delay and aggravation for the customer.
Advice to consumers: Caveat emptor. Each time you click your mouse while doing research, you are being sold that you are extremely intelligent; don't give up your power to check the accuracy of the information. This is a battle for a foothold in auto retailing and a percentage of the automobile funding market. It is all about selling trust. Buyer, beware!