By on October 10, 2017

 

2018 Hyundai Sonata Sport - Image: Hyundai

Last month Volkswagen announced it had significantly upgraded its warranties and, not a week later, Hyundai gave word that it was making a big announcement on October 10th. As the brand with the most extensive factory coverage in the business (along with Kia and Mitsubishi), we expected them to respond assertively.

The gauntlet had been thrown down and it was time for Hyundai to remind VW who the world’s value leader was. What would the response be? One million miles of bumper-to-bumper coverage? Free hats? We were ready for anything and everything.

The announcement came and Hyundai is now promoting its new retail program, called Shopper Assurance, which allows you to schedule a test drive via the internet, browse dealer inventories online, and offers a three-day money-back guarantee. Needless to say, it’s slightly disappointing, but it isn’t all bad news. 

Hyundai didn’t do anything wrong, per se. This simply felt like a missed opportunity to extend warranties and a middle finger to its rivals. Even creeping coverage up by 10,000 miles would have been an utterly ruthless move, reaffirming it as the one true king of Warranty Mountain — which sounds like an incredibly un-fun paperwork-themed ride at Disney World.

However, that wasn’t the news we were given, so we’re left to discuss Shopper Assurance.

Hyundai claims the program is a direct response to overwhelming disdain for the car buying process and part of its corporate promise to provide customers with a better overall experience. That’s a noble cause if there ever was one.

Essentially an online shopping service, Hyundai says Shopper Assurance thoroughly streamlines and modernizes the entire car buying experience. The event, held at the company’s North American headquarters, was big on its four tenets of transparent pricing, scheduled test drives, streamlined purchasing, and three-day money-back guarantee. Combined, the entire program is designed to keep time spent at the dealership to an absolute minimum without making the process more daunting for the customer.

“We expect this to be a differentiator, as our research showed that 84 percent of people would visit a dealership that offered all four features over one that did not,” said Dean Evans, Hyundai America’s chief marketing officer. “It is the future of car buying, and our commitment to creating a flexible, efficient and better way to purchase a car in partnership with our dealer body.”

Admirable and smart, especially since every industry analyst is claiming any automaker that doesn’t provide digital dealerships with wither and die in the years to come. But we’re not thrilled about everything Shopper Assurance provides. For one, you can already schedule test drives at any dealership with a physical store. But the thing that really stands out is the “transparent pricing” — which translates into “fixed MSRP.”

The automaker makes clear that all dealer websites will list fair-market pricing: the MSRP minus incentives and any dealer offered discounts. But that still means little to no haggling. While not necessarily a bad thing, we’re not sure this makes the best sense for Hyundai — an automaker whose chief claim to fame is providing exceptional value for money. But Hyundai thinks the future is in making things easier, a claim echoed by industry analysts.

“We’ve listened to our customers, and they want convenience and simplicity when it comes to buying a car. Shopper Assurance is going to give our dealers the tools we need to exceed the expectations of today’s shopper,” said Andrew DiFeo, chairman of Hyundai’s national dealer council. “With a strong lineup of new cars and CUVs, we expect that Shopper Assurance will give us a competitive advantage and help turn prospects into buyers. We are creating a modern purchasing process where transparency and convenience are paramount.”

Industry experts claim the next big thing in car buying is easy-to-use digital dealerships. Plenty suggest that younger generations will flat-out refuse extended face-to-face interactions. A little antisocial but, if it turns out to be true, Hyundai is wise for getting a jump on this.

Still, we can’t help but feel like Shopper Assurance doesn’t offer much in the way of genuine novelty. While the three-day guarantee (provided you kept it under 300 miles) is a nice touch, most reputable dealerships already have their own websites where you can browse inventories and get the ball rolling on a sale. But there is where Hyundai claims the difference will be made.

By providing a uniform experience between all of its dealers, it believes it can achieve improved customer satisfaction. Hyundai says Shopper Assurance should make it so buyers can complete most of the paperwork online prior to visiting the dealership — including applying for financing, credit approvals, trade-in values, etc.

The program will launch over the next several weeks in four trial markets: Miami, Orlando, Houston and Dallas. It will then launch nationally in the beginning of 2018.

[Image: Hyundai]

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43 Comments on “More Car, Less Dealership: Hyundai’s New Retail Program Shoots for Smoother Transactions...”


  • avatar
    Steve_S

    If you want to streamline the process let me buy a car online for what you would sell it to the dealer for (minus any incentives you have) and then tack on a $500 delivery fee for the dealership.

    The only time I need to speak to a salesman is if I want to trade in the car and then the cost of that is baked into the price they are offering me.

    • 0 avatar
      healthy skeptic

      $500 for the dealer? With the system you propose, just have the OEM ship the car to you.

    • 0 avatar
      Groovypippin

      I spend an average of an hour – and often more – with clients at vehicle delivery going through, in detail, how their quite complicated new vehicles work. First vehicle with push button start? Yep. First vehicle with an electronic parking brake? Yep. Ever used radar cruise control? Nope. Do you understand what all these settings are for your advanced collision avoidance features? Nope. Know how this navigation system works? Would you like to know how to set destinations and used voice commands? Yes, please! Know how to pair your phone to Bluetooth and use the streaming audio features? Not really.

      I consider my job to be that of “product adviser”, not salesperson. The right vehicle sells itself. I focus on product knowledge about what I sell and what the competition sells and make myself a useful resource in the transaction. But no one works for free.

      • 0 avatar
        Dy-no-mite Jay

        I guess you’re right, it’s not like they include some sort of owner’s manual with EVERY SINGLE CAR. And unfortunately we also don’t have an interconnected network of people, forums and videos accessible at our finger tips on our phones to tell us just about anything we need to know. About everything.

  • avatar
    SCE to AUX

    I’d prefer true fixed MSRP. Fixed MSRP puts more burden on the mfr/dealer to hit the right price points on its products, because you can always shop a different brand.

    BTW, IMO fixed MSRP wasn’t the demise of Saturn or Scion – it was product. Tesla’s use of it hasn’t been a problem so far.

    Trade-ins, though, will be a problem. I’d be unwilling to simply accept a virtual trade-in value, because you know it will be too low. Typically, I bundle the trade and the new car purchase to achieve a bottom line I can accept. So I don’t care which deal is better or worse (trade or new car), just so the net price is fair.

    As for the 3-day return policy, I wonder what the fine print says.

    • 0 avatar
      FreedMike

      This a hundred times.

      For every person who wants to go into a car dealership and haggle like they’re in a street bazaar in the middle east, there are four more who just want a decent deal and no BS hassle up front.

      And those four will pay a little more for a good experience.

      Lesson in there for car dealers, perhaps?

      • 0 avatar
        mmreeses

        A 2010 lesson for the folks at Genesis, if Hyundai was serious about standing out in the crowd v. Acura, Infiniti, let alone Lexus and the Germans.

        But the horse has left that barn as the franchise agreements have been signed.

    • 0 avatar
      hreardon

      I know I sound like a broken record on this topic, but: if you don’t want to haggle, pay what it says on the window sticker.

      You’re right about Tesla’s fixed price model working and how that’s tied to the fact that if you want a fully electric car, they’re really the only show in town.

      The problem, even when we get other competitors, is that every manufacturer will have different motives for moving metal and various times of the year in various regional markets. As such, I think you’re still going to see regional cash back and dealer incentives that are and aren’t publicly known.

      This, and the truth is, money talks: you may *really* want a Tesla Model S, but if you can get a $15,000 end of year incentive on an S-Class that brings its price into “I can’t pass this up” territory, on aggregate, the market will take the S-Class.

      Add in the trade-in value: Let’s say that your local Hyundai dealership (or hypothetical Hyundai OEM shop) is willing to give you $10,000 on your trade-in, but the local Honda dealership (or hypothetical Honda OEM shop) is willing to give you $13,000 on the same trade because they don’t use fixed prices, they use multiple used car brokers – but it requires some haggling – you’ll find plenty of people cross shopping.

      Not saying it cannot be done, but so far those who have tried it (both manufacturers and retailers) haven’t been terribly successful.

      • 0 avatar
        Snooder

        Carmax is the posterboy for “no haggle” and they’ve been wildly successful.

        See, the thing with your analogy is that to my mind, the “15,000 year end incentive” shouldn’t be something to haggle for. It either exists or doesn’t exist. If it does, great, add a sticky pad to the window sticker showing that the car is discounted.

        When i gor my current car, i walked on the dealership,took a test drive and was told the lease i wanted was going to be $500 a month. I left and that would have been the end of that if i hadn’t checked the manufacturer’s website to find that they are running a special. I emailed the sales guy back, and lo and behold, he was able to make the deal work at $400 a month benchmark i’d originally wanted. That whole interaction would have been a lot simpler if the dealer had told me about the special.

      • 0 avatar
        SCE to AUX

        @ hreardon:

        “…you may *really* want a Tesla Model S, but if you can get a $15,000 end of year incentive on an S-Class that brings its price into “I can’t pass this up” territory, on aggregate, the market will take the S-Class.”

        In this case, isn’t that Tesla’s problem at the end of the year, but Mercedes’ problem for the rest of the year? If M-B wants the S-Class to outsell the Model S year-round (which it doesn’t), then they need to price it more competitively.

        My point is that fixed MSRP puts the burden on the mfrs where it belongs, not on the consumer.

    • 0 avatar
      slavuta

      I said many times that car price should be set by manufacturer. If manufacturer runs adverting that “this week buy for 18K”, I should go to any dealer and get this price. But this is only when I know that all cars are sold at the current price set by manufacturer and dealer can’t change it.

  • avatar
    FreedMike

    I shopped two Hyundai dealers last fall when I bought my VW, and both played old-school, four-square, “we won’t quote over the Internet so come on in and we’ll take care of you” games. Internet pricing was all over the place, with huge discounts that they never bothered to break down by source for you.

    Would a first class buying experience have made the difference and put me into a Hyundai? I don’t know (probably not). But in the end, this nonsense was the reason why I basically gave up on buying anything from in the first place.

    The product was good enough to get me in the door, and make me want to take the next step and run prices, but the pricing and sales strategies were a no-sale for me. They’d have had a much better shot at that sale – and the sale that comes in the future – if they hadn’t played these nonsense games.

    • 0 avatar
      hreardon

      Hyundai has traditionally attracted value shoppers who are more interested in getting a good deal than they are in the product specifically. Granted, broad brush strokes in my statement.

      My last car (’16 GTI) was transacted almost exclusively via texting. After I drove the car, I texted the dealer about a month later when I was ready to buy and here’s a rough translation of how it went:

      1. ME: Here’s what I want, here’s my trade
      2. HIM: I can get that, and the approximate trade value will be $4500, +/- $500 once we see it
      3. ME: Great, you need a deposit to locate?
      4. HIM: Price is $32,xxx
      5. ME: Great, I see invoice as $29,250; I’ll do $29,250 plus the $1,000 incentive for sale price of $28,250.
      6. HIM: Works. I’ll text when car here for pickup

      Two days goes by…
      1. HIM: Car is here, when do you want to stop in?
      2. ME: I’ll be there at 7pm this evening

      Walked in, agreed on $4700 for the trade, paperwork was already prepped at the agreed upon price and an hour later, I was out of there. I was honestly dubious that they would uphold their end of the deal since it was all done over text, but they were very upstanding.

      My wife’s last two Jeep Grand Cherokees were equally simple transactions done via email.

      Did I get the most rock-bottom deal for my Jeeps or the GTI? Who knows. I could have probably wrung another $500 – $1,000 out of either deal, but they were painless transactions. I go in with good information and research and have reasonable expectations as a result. Like any retailer of a capital good, if I don’t like the establishment or staff or the way they work, then I find another one.

      • 0 avatar
        Internet Commenter

        Where are you able to find reliable information regarding the invoice price?

        I recall hearing that TrueCar is no longer reliable. Actually, I think there was an article on this site where Jack Baruth said the TrueCar price for his truck was higher than the first dealer quote.

  • avatar
    turbo_awd

    Here’s what would work for me:
    -free 30 minute test drives/sitting in the car to try things out
    -$50 to rent a car for a weekend, without the salesman sitting over my shoulder the whole time “nice, right?”. Yes, that’s right, I’m willing to pay to test drive a car a weekend – with mileage limitations. This is the service/value-add the “dealership” provides. Sure, $25 for a Civic, $50 for a Cadillac, etc. If Budget can make $$ renting a car for $25/day with unlimited mileage…

    -rental fee is refundable if you buy the car (a small thing, but…)

    -online ordering with fixed price/delivery to your house (eg. Amazon)

    -7 day return policy with reasonable mileage

    I realize dealers have to make some $$, and keeping a few demos in stock and running well costs, hence the rental fee. But I’d like a longer trial than the 30 minutes that feels reasonable to keep a salesman.

    • 0 avatar
      john66ny

      This.

      Sell cars like you sell puppies… take it home for the weekend and see if you want to bring it back.

    • 0 avatar
      JMII

      Sounds good to me.

      When I got my ’96 Eclipse I hated it during the brief test drive, mainly because the roads the dealership took me on (narrow pothole infested downtown). It also had a black interior with no sunroof and felt too cramped. However there were things about the car that I loved (oh that turbo). So I returned the next day with a simple proposal: I want a sunroof, tan interior and I need to drive it for a FULL day before we can talk further. They agreed… and I drove the car from the dealership, to my office then back home simulating a normal commute. Then I went out to dinner and a movie with the wife simulating a normal weekend routine. I spent several hours in the car on roads I was familiar with. This experience completely changed my opinion of the car.

      When we bought our last car at CarMax (about 10 months ago) the sales guy basically tossed us the keys and told us to call him when were done so he could open the gate and swap out the other 3 cars we identified an interest in. Zero pressure, in fact there was zero effort at selling any features or talking up our choices at all. He seem to understand we just needed seat time to see which car fit us.

    • 0 avatar
      brn

      Dealer near me charged us $5 (that’s not a typo and it might have been less) to rent the car for the weekend. We walked in the door on Monday evening (they let us keep it through Monday) and said “deal”. Letting us have the car for the weekend was the best thing they could have done.

      I don’t think they applied the $5 to the purchase though. :)

    • 0 avatar
      sgtjmack

      Every dealership I have worked in across the U.S. has always allowed the person to take extended test drives at no cost to the customer. All you have to do is ask. I would go on the initial test drive in order to point out the features/benefits and then return to the dealership with them. If they wanted to take it again, by themselves or to their house etc. then I would get the appropriate paperwork and allow them to leave with the car.

  • avatar
    TurboX

    I have never considered a Hyundai but had they offered online shopping with delivery to my door where I never had to step at a dealership except for service, then my next car would be a Hyundai.

  • avatar
    CKNSLS Sierra SLT

    As someone who just purchased a new Hyundai Santa Fe XL about 6 months ago-the deal was pretty straight forward until we walked in to finance. All of a sudden there was a line item on the contract for Nitrogen (that’s right air) for $200.00 and another $300.00 line item for lost key insurance.

    Mind you-when you looking at $30,000.00 purchase your savvy enough to tell them to take a leap. I ended up buying the CUV-after the line items were removed.

    I did mention both things on the survey Hyundai Corporate sent me!

  • avatar
    volvo

    Get rid of the F&I step (unless you want or need it) in the purchase process and you will get my business.

    The process should be identify car, test drive, look at options, agree on price for properly optioned car. Pay for purchase and drive off. I only want to step into the F&I office if I want the dealership to finance or lease the car.

    Document fees should just die. Build them into the price of doing business. Any other necessary paperwork could be done by a properly credentialed dealership employee.

    Last time I presented the dealer with a cashiers check for the agreed OTD amount I still had to go through the F&I including credit check and filling out finance form even though I wasn’t going to finance the car.

    • 0 avatar
      brn

      I’m with you on F&I. We wrote a check (money order) for our last three cars. Why do I still need to spend an hour with F&I? Take my money order and give me the damn keys!

      • 0 avatar
        87 Morgan

        Because even if you pay cash for a car the dealer is required by law to run an OFAC check to make sure you are not a terrorist/drug lord etc.

        This is why you have to provide a DL and address. Theoretically, you don’t need a social, but if you have a common name you will want to give your social as most likely your ‘name’ is on the hit list and they will need to narrow down to prove you are not the terrorist or whatever.

        this is why the F&I; they protect the store.

        • 0 avatar
          volvo

          So you are telling me that I need someone to push nitrogen filled tires etc to confirm my identity. I am not buying that!

        • 0 avatar
          volvo

          Also I looked up OFAC check. Here is the description.

          “OFAC Search
          The Office of Foreign Assets Control, or OFAC, of the U.S. Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries, terrorists, international narcotics traffickers, and those engaged in activities related to the proliferation of weapons of mass destruction. The most recent, master list of Specially Designated Nationals and Blocked Persons that is made available by OFAC will be searched. If a name match is discovered in the database, CS analysts will attempt to identify the data on the list to the subject of the background check.”

          Please tell me how that applies to the purchase of say a toyota corrola by an american citizen from a licensed dealership.

          • 0 avatar
            FreedMike

            That’s a good question for your elected representative, volvo…but 87 Morgan’s correct. Dealerships are required to run OFAC checks on cash purchases.

          • 0 avatar
            Snooder

            Remember the articles about a toyota pickup with some poor bastard’s name on it being used by ISIS? Yeah.

            Although more than likely the main goal is countering money laundering. Imagine, you buy a nice shiny $30k corolla in the US with cash. Then you ship it to Mexico and sell it there for $25k cash. Boom, you just managed to launder $25k in drug money.

            Pro-tip, US citizens can be criminals too.

        • 0 avatar
          brn

          87 Morgan, you know we’re not going to buy that.

          One place I purchased from was pretty good. I spent no more than five minutes with F&I. Their focus is commercial sales and they rely on repeat business, so they don’t BS the customer.

          As volvo states, the real reason I had to spend an hour in F&I in the other dealers is so they can attempt to confuse me into giving them more money.

        • 0 avatar
          healthy skeptic

          They protect the store…among other things.

  • avatar
    Jeff S

    Allow me to choose the color and the trim. I don’t mind the limited colors and trims but I would like to be able to get the color I prefer within what is offered even if a have to wait. If I want a silver Base Colorado with a block heater instead of a white or black one in stock I am willing to wait. Most of the dealers stock white or black in their inventory.

    • 0 avatar
      hamish42

      Went to dealer 1 looking for a Honda Fit Sport 6M. He said Honda Canada was only shipping black and white ones. I wanted “Orange Fury”. He said 3 month back order no guarantee of color in a 6M – I might get it in the upscale Sport though. Checked the lot, all he had were white and black “Honda Sensing” Fits. I went to dealer 2, who also had only black and whites on the lot. He got me my color in 9 business days, no hassle. Obviously, dealer 1 wanted to clear his inventory. The fact is he straight up lied in my face. That’s why people want to go online. There is too much lying and disrespect in the auto sales game.

  • avatar
    tallguy130

    Maybe my Hyundai dealer is an anomaly but I already had most of this when I got my Elantra Sport.

    I was able to set up a test drive online and had worked out the terms of the sale (contingent on my liking the car) before setting foot in the dealership.

    They did try a half hearted attempt at Shananagans in the F&I office but that was easily shut down. Overall I was able to get all of the experience above and still get the price WELL under MSRP.

    Now contrast that with the local VW and Mazda places I worked with and I would say I’m rather inclined to buy another Hyundai. Amazing what not being a scumbag to the customer will do.

  • avatar
    threeer

    Seems most of what they propose is more or less already out there. I can schedule test drives online and browse a dealer’s inventory from the comfort of my home. What’s new in all of that?

    I do agree with letting a person take a car home for at least a full 24 hours. Of course, I’d assume some limitations so tire-kickers wouldn’t attempt to score a cheap Corvette for a Friday night…

  • avatar
    nels0300

    Didn’t have any issues with my recent Hyundai purchase.

    Dealer was very clear about which rebates were available and who qualified. No funny business in the F&I department, and was able to get a manual Elantra Sport for $18.5K with no effort. It took an hour and a half.

    I’m 41 years old, bought over a dozen cars, and I’ve had worse experiences at Mazda, Toyota, Subaru, and Ford dealers.

  • avatar
    AndyYS

    Another vote for no haggling and up-front pricing.

  • avatar
    hazmat

    Complexity (MSRP, invoice, hold-back, incentives, trade-in, finance, doc fee, dealer options, etc.) puts the advantages on the sales side. Yes, it’s a yes/no game for the buyer, in the end, but the complexity is designed to obfuscate the negatives in the deal (incl. fatiguing & confusing the buyer) and get a “yes” at higher profit.

    Transparency in the form of non-negotiable pricing does not mean that profit centers are reduced or clear to the buyer. However, it does clarify true cost of the purchase for the buyer, which is an improvement.

    However, max value for the concept comes only if all makes use transparent and fixed pricing (e.g. internet shopping for a phone accessory). Otherwise, you are cross shopping a fixed value with an obscured one and this is a disadvantage for the simplified price model (or at least for retaining profit within that model).

    So, good for Hyundai but they will have to have compelling pricing to make it work.

  • avatar
    slavuta

    Let me tell you what happened to Hyundai. Some people thought, Hyundai make great cars now (without understanding how company operates). The bought their Sonatas and they found it not great cars at all. so, they not coming back.

  • avatar
    ryanwm80

    There’s no reason this couldn’t be copied by other car companies / dealers.

  • avatar
    tobiasfunkemd

    Bought a new 2017 Tucson SE Plus AWD in June. Did the truecar thing through USAA and went with the best deal. Almost walked out when the sales guy told me the truecar discount included the $500 military discount; I then used AAA’s truecar feature to show him the same discount as USAA, sans military connection. He pleaded ignorance and the rest of the transaction was quite smooth, most likely for fear of getting roasted in the dealer survey. Not the best dealer experience, but certainly not the worst. This was my second Hyundai new car buying experience; the first was for a 2013 Veloster that I negotiated via email from India, and took delivery of two hours after touching down in LAX. Completely painless, and sold me on Hyundai. I suspect that their repeat customers are going to want to haggle to feel like they’re getting a deal, but if the pricing is fair I have no issue with this plan.


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