By on May 1, 2020

Chinese Lincoln Dealership, Image: Lincoln Motor Company

My maternal grandmother lived with my mom, my brother, and me until I was about fifteen years old, when she suddenly passed away from complications resulting from a stroke. She was an amusing woman to be around — her personality was an interesting blend of old world sensibility and shocking racism. Grandmom had a degree from the Philadelphia College of the Bible, and could quote chapter and verse to you, and then curse you out for leaving socks on the floor seconds later. But the one thing that I remember the most about her was that she kept a large tin of buttons in her room.

If you had a jacket or a shirt that was missing a button, Grandmom would slowly shuffle over to her chest of drawers, pull out her tin, and carefully dig until she found an exact match — which she always had. One day, I asked Grandmom Mary Ellen why she had all of these buttons, some of which were clearly decades old.

“When I was younger,” she said, “we saved everything. You never knew if you’d be able to find those things again if another depression hit.

“Cotton from medicine bottles. Newspapers. Scrap metal. Cardboard. And then we’d find ways to reuse it. The economy came back from the Great Depression, but my parents never did. I guess I still have some of their habits.”

Okay, Bark, you’re over 200 words into an editorial, and you haven’t said a thing about cars yet. But hear me out. Everybody thinks that this “blip” in the economy is going to shift the way that people buy cars, that the online shopping model will become the new normal. Perhaps we’ll even see the death of the franchise model, and direct-to-consumer sales will start happening.

Your Uncle Bark knows better. Click the jump to see how my conversations with dealers have led me to believe that the car buying business is going to change — but not for the better. Just like those hoarders who lived through the Great Depression, manufacturers, dealers, and buyers will likely have their behaviors changed for good by this… I can’t use the politically charged language I’d like to here. We’ll call it a crisis.

Data mining will become the new advertising.

You know how Madonna just kept putting out records for a long time, even when it was clear that she didn’t have anything new to say? Record execs liked Madonna (and Aerosmith, and Prince) because she had a pretty solid base of customers who would buy anything she put out. It was always safer to release a Madonna record that would absolutely sell a million copies than take a risk on some new act that might not sell 10,000.

Car dealers are going to do the same thing — in fact, they already have. The dealers who are thriving during this crisis are using a combination of Customer Relationship Management (CRM) tools and online retailing to target customers who have already bought from them in the past.

Thanks to a combination of service records, loan information, and even social media behavior, dealerships have a very, very good picture of when their prior customers will be ready to buy a car. The best tools can predict this very accurately within about a 30-day window, and send out promotional offers to customers in those windows.

Rather than casting a huge net to try to catch anybody who might be interested in buying a car, dealers will be focusing more of their efforts on selling that second or third car. I personally know of dealers, especially in the luxury space, that are having record sales months right now thanks to these data mining efforts.

Third-party classifieds are dead.

Cars.com? Autotrader? CarGurus? Y’all had a good run. Congrats. But you’re done.

All of these companies have been telling dealers for years now that leads generated are no longer a good measurement of buying behavior, because people don’t want to be harassed. They’d rather just show up on the lot. Declining phone calls and emails to the dealer aren’t a sign that these websites no longer work in 2020, it’s just a sign that customer behavior has changed. Right? Right? Right.

Autotrader and Cars.com can both “prove” that a customer looked at a vehicle on their sites and then brought their mobile device to the lot. Of course, privacy laws prevent them from being able to share specifics on those customers, such as their name, device ID, or anything would actually prove that the customer had bought a car. But they love to use what I call “vanity metrics” to prove that advertising with them is worth it — Vehicle Detail Pages viewed, Search Results Pages viewed, time spent on site, etc.

“100 vehicle detail pages equals one sold car!” Hell, I’ve said that to dealers myself. We could never prove it, but it sounded great.

Welllll…now that we know that the only way that a customer can buy a car in most states is by contacting a dealer via phone call or email, dealers will quickly figure out that these third-party sites are huge wastes of money. The emails and phone calls aren’t coming from Autotrader, and they won’t. If dealers don’t immediately chop all of their classified spends and put that money directly into search engine optimization, search engine marketing, and data mining, they deserve to die.

Sports cars are on life support, and the plug is likely to be pulled.

As I’ve told you over and over and over again, the true customer of the manufacturers is not you — it’s the dealer. The dealer is the one who provides feedback through his regional rep to the OEM about what’s selling and what isn’t, and when he’s forced to take on slow-selling inventory in order to get more small CUVs and full-sized trucks, he gets pissed off.

Now consider that we just passed 30 million unemployment claims in the US. That’s 30 million working Americans who have just realized that they are much, much closer to bankruptcy than they realized. 30 million people who probably aren’t paying many of their bills right now, including their rent.

How many of the people reading this blog post right now have filed for unemployment in the last six weeks? For many of us, it will be a long time before we do anything that doesn’t look like saving money for the next rainy day. How eager do you think we are going to be to buy expensive toys in the next couple of years, now that we know how quickly we can lose everything?

Dealers know this, and while they may have pushed for “exciting” and “sexy” on their showroom floors in recent times, they’ll be begging for “safe” and “sellable” in the near future. Which means bye-bye to any new platforms for sports cars. Mustangs and Challengers are probably safe. That’s about it.

Online retailing will see a spike, but it won’t last.

Too many of the people out there who actually have the money to buy a new car are stuck in their ways. They want to be able to test drive the car, to put their hands on the fabrics, to see the colors in person. And the generation that has some comfort with large online buying purchases (namely Gen X and Y) probably just got a massive financial kick in the ass.

Some people will love the experience of buying online, but lots of people who buy cars through online retailing now are going to have negative experiences — I’m already seeing it in the forums. The paint has swirls, the tires are worn, etc. In fact, I would venture to say that people’s desire for safety and security will likely decrease the amount of risk they’re willing to take in buying a car, even a new model, sight unseen.

And that’s not all.

The upcoming months will tell us a lot about the new future of the car business will look like. There’s no doubt that we’re all living in interesting times, but the car business is likely to be more interesting than most. The fact that even I, with nearly a decade of automotive retail experience, can’t predict everything that will happen, should tell you how murky the waters are about to get.

Stick around, send me an email, and I’ll help you get through it.

[Image: Lincoln Motor Company]

Get the latest TTAC e-Newsletter!

Recommended

93 Comments on “Bark’s Bites: What Will Car Buying Look Like Post COVID-19? Maybe Not What You Think...”


  • avatar
    Guy A

    Interesting article and makes sense. In my experience few dealers seem good at long term customer relationship nurturing.
    On sports cars I would expect the MX5 is ok since it has lowish sales and the people buying them have either a safe job or large net worth. Now if stocks go back down 30% it could be a little different.

    • 0 avatar
      Glenn Mercer

      I agree re the MX5: never has a car so perfectly fit (and then dominated) its niche. But I see a bigger problem with sports cars than their prices. It is that sports cars (excluding the ultra-exotics) just don’t outperform “regular” cars like they used to. Using the website zero60times.com, take say 1965: Impala SS does 0-60 in 12.4 seconds, Corvette in 6.1 (I am sure bowtie guys will tell me I used the wrong models and trim levels, but gimme a break). SIX second advantage. Fast-forward to 2014, Impala LT at 6.1, Corvette at about 3.7. Less than THREE second difference. Still about 2:1 relatively, but the sports car is no longer leaving the sedan in the absolute dust. So I think it is harder to persuade people to pony up for the extra bucks. (Notice my half-assed theory leaves out little details like relative prices, etc.!) Heck, look how fast a typical BMW CUV is! Depressing. (BTW I own a 1996 NSX. Probably a current Camry can dust me… sigh.)

      • 0 avatar
        Art Vandelay

        I think the Miata is the safest car from those sorts of conclusions. It has sold in every generation IN SPITE of it’s traditional straight line performance (0-60, 1/4 mile)…not because of it. It has been the standard bearer of the “slow car fast” crowd since before one could hear the phrase “Here is a new one from Nirvana” on the radio.

        This is not a huge niche, but it is a consistent niche with loyalty probably second only to the full sized truck brand loyalists. Furthermore, I see young people driving them…there are even a couple (NB models) in the student section of my kid’s high school. Additionally it has always been one of the few of the breed that was perfectly livable and even practical for daily use.

        I think the Miata is the most likely of that bunch to survive.

      • 0 avatar
        Flipper35

        That site uses the 283 powered Impala SS. If you go 327 your 0-60 is 8.4 seconds and the big block (396) powered one does 0-60 in 5.9 seconds.

        https://www.automobile-catalog.com/car/1965/389930/chevrolet_impala_ss_sport_coupe_327_v-8_turbo-fire_250-hp_4-speed.html

  • avatar
    Lou_BC

    Well written. I do agree that most people no longer feel safe and that will have a profound affect on many. My father lived through the Great Depression and WW2. He was very cautious and risk averse. He made sure there was always money in the bank, and food in the house.

    • 0 avatar
      Zipster

      A very rare quality today in the U.S.

    • 0 avatar
      Felix Hoenikker

      Sounds lot like all of my depression era relstives

      • 0 avatar
        golden2husky

        And frankly, saving and reusing things make a ton of sense for those with some space to store stuff. Americans generally are terribly wasteful; I applaud those who actually get a full life out of things instead of filling landfills with still-usable stuff.

        A guy at work came to America 30 years ago and managed to furnish his ratty one room studio with furniture and a TV that he picked out of the trash. “Only in America can you get good things right out of the trash. ” he said. While it was great for him, I think as a country we can do better.

  • avatar
    ravenuer

    I would never, ever buy a car without going over it with a fine-toothed comb, not to mention taking a thorough test drive. And then go home and sleep on it.

  • avatar
    tinbad

    “ The fact that even I, with nearly a decade of automotive retail experience, can’t predict everything that will happen, should tell you how murky the waters are about to get.”

    Should’ve started your piece with this, save us the read.

  • avatar
    gasser

    Luxury car dealers with record months??? WOW!! I don’t know how sustainable that its. Most luxury manufacturers have moved down market to capture volume or to entice new buyers into to fold (I.e. Mercedes with the A and B cars and GLA and GLB). I don’t know how these new customers will make their payments in a world of layoffs, unpaid rent and credit card 23% interest. I think that there will be a real economic down shift as people need to pay off debt and SAVE $$ for an uncertain future. I think that brands like Hyundai will be the beneficiaries of the new trend. For me and people in my 70+ age cohort, I foresee a lot of keeping older cars, down sizing and purchase of one or two year old vehicles. There will always be a luxury car market, but it won’t mimic the current volume of leased Mercedes, BMWs and Audis. The Immediate future of car buying will be bleak, and via car buying services.

    • 0 avatar
      SSJeep

      No doubt, and I can see they days of $12000.00 “options packages” going the way of the dodo bird, and instead bundling these options packages into the MSRP to try and sell more cars.

      Try to get Dynamic Cruise Control on an F150, or a Macan, or a 3-Series. Its going to cost at least a mid-4 figures worth of other extraneous BS in order to just qualify to check the box. Then go to look at a Toyota – and its standard.

      I also see the “appearance packages”, LPO/CPO options, and port-install options go by the wayside. GM and their dealers make a MINT on $3000 Chinesium chrome wheel LPO packages that do nothing for handling and simply pad the dealers pockets. Same with Ford appearance packages, etc. Get rid of them and bring the costs down so more people can afford to buy, and they will sell more cars.

      • 0 avatar
        redapple

        ssjeep

        I bought a new 2018 Forester, Premium. 1 level up from base.
        It has smart cruise. Auto braking. Lane Departure (with a defeat button and it stays off even if you turn off the car (Subaru’s Aerospace backgroud showing up there?))
        Rear cross traffic WITH pedestrian sensing.

        On a GM you need almost the highest level trim to get these goodies. F them and the attempt to soak their customers.

    • 0 avatar
      Glenn Mercer

      Yes, but… remember, in the USA the most popular “luxury car” is a pickup. From Cox we have actual 2018 average transaction prices (net of all discounts, incentives, the works): mid-size car $29,000, mid-sized SUV $38,000, full-size pickup truck: $47,000. Ford sells more vehicles over $50,000 in the USA than Mercedes does (according to TrueCar), and it’s all pickups and SUVs. Years ago pickups were the rattling no-frills workhorses… somehow over time they added horsepower, doors, rows, amenities, the works…and became America’s luxury car. Given that “trucks” now outsell “cars” in the USA, this looks like the new reality. I’m 65 and still think it is a CAR world, but I have to throw in the towel: trucks rules the American roads, and they cost a FORTUNE!

      • 0 avatar
        Lorenzo

        The 4-door full-size pickup is the equivalent of the full-size sedan in 1975. A Chevy Caprice in 1975 was about $28k in today’s dollars, a Buick electra was wabout $34k in today’s dollars, and a Lincoln Town Car was about $49K in today’s dollars.

        They don’t make full size sedans anymore. If you want a 4-door, RWD, long wheelbase V8 with big doors and lots of rear headroom, a truck is your only choice.

      • 0 avatar
        Art Vandelay

        They are 2020 Broughams. Big, Powerful, formal rooflines that make the rear seat usable. Mine is a Brown XLT that I always think of as something akin to a modern Delta 88 or something when I’m not pulling my travel trailer with it.

  • avatar
    PandaBear

    A desperate sales from either a rental car company or manufacturer. I would love to get a driverless car that will pick up groceries for me but that’s probably going to be the next next car when Covid-40 hit us again.

  • avatar
    ajla

    “Which means bye-bye to any new platforms for sports cars.”

    Were there really any new platform sports cars planned anyway? I guess the rumored 400Z, but that’s likely just a tweaked and stripped Q60 RedSport. The Camaro and 86/BRZ might be in trouble but I think the rest of the current market will at least stick around for the rest of their current life cycles.

    • 0 avatar
      dwford

      Camaro has no replacement scheduled after this current model, and the Mustang is keeping its current platform for the next generation. Who knows what will happen to the ancient Challenger. They say there is a new 86/BRZ, but will it be a new platform or a rehash of the current one. I bet it’s a rehash. As for Nissan/Infiniti, they’ve been using the FM platform for 20 years now, so they desperately need a new platform for their RWD cars, assuming a new generation is coming.

    • 0 avatar
      el scotto

      @ ajla I don’t have any insider information on the Miata other than they lead the smiles per gallon brigade. If Bill Ford has things his way, the Mustang the next to last vehicle Ford stopped building after the F-series. GM, for once, has he good sense to leave their staff in Bowling Green alone. The Germans have figured out that adding M,S, or AMG to a sedan makes them four door sports cars. Oh for a four door, 4WD ‘murrican truck with a big stonking V-8. To haul the boat, ya know.

  • avatar
    Yankee

    Some interesting thoughts here, but I’m not sure I agree with the death knell for third-party sites. Besides car guys like me who constantly check them just for fun (always hoping the car of our dreams might pop up at a bargain basement price), most folks I know check craigslist and other sites long before setting foot on a dealer’s lot to be pounced on by a guy who worked at Best Buy last week and has no clue about the product. I think you’re right about the model changing, and I wish you were right about the possibility of dealers going away and direct sales becoming the norm. But either way, I think there will always be a market for independent (real or perceived) sites to compare a wide variety of vehicles from different sources. That being said, one of my favorites – listingallcars.com – is now gone!

    • 0 avatar
      JonBoy470

      I’ve got to go with you on this. The shift to online sales models is inevitable, but will be a secular change. The Boomers, for whom the feel of the wheel is necessary to seal the deal, are heading into retirement and will soon start aging out of the market. Millennials have had a collective failure to launch, but after their hipster phase of the last decade, they’re starting to make real money, and are now adulting.

      My work-site employs a revolving door of millennial recent-college grads. So I’ve gotten to observe their habits. They are much more attuned to the “experience” and “convenience” of doing a thing, than their forebears were. They’ve never even had cable, let alone a land line. They do a massive fraction of their shopping online, to the point some I’ve worked with do not shop at brick and mortar stores, at all. Ordering online is quicker and more convenient than shopping at brick and mortar, and can be accomplished without interpersonal interaction. A few taps on the phone, the TP will be here tomorrow. Sure they could get TP “right away” at Walmart, but that requires a time commitment on the order of an hour or more, not seconds. Even with clothes. They’ll order a shirt, and return it if it doesn’t fit. Sometimes they’ll preemptively order three of the shirt, in different sizes, and plan upfront to return the two that don’t fit. Much more convenient than going to the mall.

      Where am I going with this? Without fail, once they go buy a new car, they complain about the inexplicably Byzantine process that was involved. How it was a stressful, opaque, unethical, and unnecessarily time-consuming process. And they’re not confident they got a good deal. The Carvana Buying model holds appeal to them. It is straight-forward, not time consuming, and devoid of high-pressure selling. They are willing to pay a premium (to a point) for this experience.

      But it’s sight unseen! Whatever. They’re already buying everything else sight unseen. Except maybe they have a friend who already owns the same model. At any rate, it’s an appliance that will be amazing, in comparison to their current hooptie (or Uber). If the car is not all it’s cracked up to be, they’d just return it in the seven day window, and order another one. Just like the shirt.

  • avatar
    Vulpine

    A nice thought… but if I can’t get a car equipped exactly the way I want it, it doesn’t matter WHAT the dealership may have on their lots–I’ll custom order as I have for three of my last four new cars.

    Used? I refuse to buy used because my odds of getting something reliable and economical are 4:1 against. That I’ve learned through pure experience.

  • avatar
    dwford

    As someone who worked in internet sales at a dealership for years, I can definitely tell you that the 3rd party leads have always been garbage. Most of the time the “customer” wasn’t intending on being contacted by a dealer, and either put in wrong info on purpose, or were just not happy to be bothered. Never mind that that 3rd party lead didn’t just go to one dealer. Most of the time when a 3rd party lead came in, the notes that the potential customer took the time to type in to their info request did not make it to me, so when I made contact, they weren’t happy that I didn’t know what they were interested in.

    I think longer term more people will switch to the Carvana purchase model, just to completely eliminate that human interaction. I don’t necessarily think that it is the best model for the consumer due to pricing and the potential to get a flawed car dropped at your house.

    • 0 avatar
      ajla

      I’ve used 3rd party search sites to find both of my new car purchases and for most of the ones that I’ve helped friends buy.
      Now I don’t ever fill out “contact me” or information requests or anything like that so I don’t know if that is counting as a “lead” for the dealer but I’m definitely still using it. I find the car online then call the dealer about it. Sometimes I’ll even just be a walk-in.

      Most dealer websites are useless and so filled with pop-ups and flash animations that it is like going onto a 1999 porn site.

      • 0 avatar
        SirRaoulDuke

        “Most dealer websites are useless and so filled with pop-ups and flash animations that it is like going onto a 1999 porn site.”

        Exactly this. I bought a car two weeks ago, and while I used Autotrader to get a feel for the market, I always double-checked the dealers’ websites to make sure the info was correct….and every single one was TERRIBLE. I don’t know who is selling webpage services to dealers, but they all need to go out of business tomorrow.

      • 0 avatar
        SaulTigh

        But how else will you know that you can get a $50 gift card JUST FOR TAKING A TEST DRIVE unless the flash animation tells you?

    • 0 avatar
      JonBoy470

      As a buyer, I use CarGurus to see all the different dealers’ inventory at the same time. The site is more streamlined, and easier to navigate than the dealer pages. It’s like Kayak, but for cars.

      I commented above about millennials. Boomers are going to age out in the next few years, and take their “feel of the wheel seals the deal” mentality with them. millennials buy *everything* online; the Carvana and Tesla Sales model holds great appeal for them, for convenience, selection and time-efficiency.

  • avatar
    kcflyer

    We bought a new (sort of) Lexus GX 460 two weeks ago. IF not for autotrader it would not have happened. We were planning to order one early next year. But i have been watching auto trader to get a feel for pricing. Low and behold here sits the exact model / trim / exterior and interior color. It says used and is discounted nicely but only has 7 miles. Ended up driving 10.5 hours one way to make the deal. Never would have known about the truck if not for the third party. Now why an dealer can “discount” a vehicle by making it used on paper is beyond me. Add to that that we get the Certified Lexus warranty witch ends up better than the new car warranty and it gets more confusing. But i’m not complaining. Very happy with the deal.

  • avatar
    deanst

    “ The fact that even I, with nearly a decade of automotive retail experience, can’t predict everything that will happen, should tell you how murky the waters are about to get.”

    I certainly hope this was an attempt at humour, otherwise someone is a bit delusional.

    • 0 avatar

      Go read my editorials for the last eight years. Pay special attention to ones where I make predictions about the industry. Find one where I was wrong.

      I’ll be here waiting for your response.

      • 0 avatar
        deanst

        On August 25, 2016 you wrote:

        “There’s absolutely no reason to think that used car pricing will go anywhere but up in the near future.”

        According to the Federal Reserve Bank of St. Louis, (the Consumer Price Index for All Urban Consumers: Used Cars and Trucks in U.S. City Average (CUSR0000SETA02)), used car prices proceeded to fall from a level of 142 to 136 one year later, representing one of the biggest declines seen outside of a recession.

      • 0 avatar
        qwerty shrdlu

        Not to be cynical, but if for some reason the website wants more clicks and views, then sending certain readers off to obsessively read every editorial for the past eight years is actually brilliant.

  • avatar
    eggsalad

    It seems like the presence of used-car data in abundance has turned used cars into a commodity. Take a look at 3-year-old Camrys, with the same trim level and mileage, and they’re priced within a few hundred dollars at any dealership you look at. Bargains are rare, and require unusual circumstances.

  • avatar

    too long to keep my attention.

  • avatar
    dal20402

    If third-party classifieds all perish, how will customers find the exact cars they want? Will there be no alternative but to slog through the website of every dealer in the region/state/country?

    • 0 avatar
      jack4x

      I had this thought as well. The manufacturer’s sites are worse than useless for finding vehicles after you “build your own”.

    • 0 avatar
      Acd

      Third party classified sites are essentially vehicle specific search engines and are an incredibly efficient and useful tool for finding cars as long as they have sufficient inventory on them. The number of dealers listing cars on all the major sites is down which has significantly diminished their usefulness for consumers.

      • 0 avatar

        Ding!

        If they continue to exist, it will be in a drastically different way, and dealers will pay drastically lower rates.

        • 0 avatar
          Daniel J

          Here is the rub. If car dealerships refuse to quit putting cars on 3rd party websites I won’t buy from that dealership. I test drove a new escape because the model we wanted to test drive was listed on cargurus and drove 30 miles to a dealership in a different town because the closest dealer didn’t have one listed on car gurus. I’m not going to individual dealerships websites to find a specific model and trim. Eff that.

          • 0 avatar
            Art Vandelay

            Honestly it would not be terribly dificult to simply develop a tool that crawled individual dealer sites to replace the third party sites. There are national craigslist search utilities for example.

  • avatar
    SCE to AUX

    Several – but not all – of my car purchases since 2009 have been found via 3rd party websites, but I purchased them in person.

    Cars.com is my go-to, and I find the others to be cluttered, slow, out of date, or confusing. Dealer or mfr websites are downright awful.

    Last summer, I made the mistake of reaching out to a local Ford dealer about a used Altima for my mother. I’m still declining calls from them – don’t they realize that a lead from August is long dead?

    • 0 avatar
      dal20402

      Thinking through my last few car purchases and how I found the car…

      I haven’t used third-party websites for any of my last three *new* cars. All of them were found by checking local dealer websites and emailing dealers that had something close to the right car in stock. The last time I used a third-party site to find a new car was my G8 GXP in 2009, which was of course much rarer and difficult to find.

      But I’ve used them for every single *used* car I’ve bought during that time. I ultimately found the 1995 Legend on Craigslist (which is also dying, but that’s a different story). But I found all of the more valuable used cars through either Cars.com or Autotrader. Without those tools, I might well not have bothered to find the cars.

    • 0 avatar

      This shows that the plural of anecdote is not data, unfortunately. Cars.com is in the worst shape of any of the third-party sites. They put themselves up for sale last year and had exactly no takers. They’ve laid off so many people that I’m not sure I know anybody who’s left, and I worked with them from 2016-2019.

      • 0 avatar
        dal20402

        Genuinely perplexed about how people will shop for used cars without these tools. Even at the very biggest dealers, it’s not like you can walk onto a lot and know there will be “three-row CUV with lowish miles and decent reliability ratings” on the lot, let alone “2016 Highlander Hybrid Limited Platinum in a non-obnoxious color and excellent condition.”

        I’d hate to go back to how I shopped for my first couple of cars in the early ’90s, which was “drive all over town hoping to see something sort of adequate-ish on a lot somewhere.”

      • 0 avatar
        SPPPP

        I don’t like Cars.com very much, but the last car I bought was found on that site. I find Cargurus pretty nice. Great for window shopping.

        I find that many auto dealers don’t do a very good job with their websites. I don’t know how they will be able to reliably generate leads and traffic without any 3rd-party classifieds.

        As a consumer, for me to accept the options that a local dealership wants to show me seems against my best interests. And it goes against the trend of the last 25 years.

        Opting out of 3rd-party classifieds would basically be a dealer accepting a reduction in views in exchange for limiting the potential customer’s information about competing offers. If a particular dealer’s offers can’t stand up in an open marketplace, then we as consumers should not accept them.

        Other than certain sections of the country where giant dealer groups control a significant portion of the market, this strategy seems risky for dealers.

        • 0 avatar

          If you knew how many actual leads are generated from AT, Cars, etc., you’d think differently.

          Hint: not many

          • 0 avatar
            28-Cars-Later

            Whats the percentage range you have seen? Thx.

          • 0 avatar

            Can’t answer that. NDA.

          • 0 avatar
            28-Cars-Later

            Gotcha, thanks.

          • 0 avatar
            duncanator

            I’m not saying you’re incorrect, but the last three vehicles I’ve purchased I found through a third party site. I then went to the dealership to look at the vehicle in person. It’s hard to say that the sites don’t add value because there’s no data to track unless I told the dealer how I found the car. After I walked into the dealership, they really don’t care how I found it.

          • 0 avatar
            dal20402

            So, in 2023, somebody decides “I want a used Corolla and I want to pay around $12k.”

            How will they find one?

          • 0 avatar

            They put “used corolla near me under 12000” into the search bar. Most people are doing this in 2020.

          • 0 avatar
            Daniel J

            Mark,how would you or even the dealer know that I used a 3rd party website for that lead? You don’t unless ever customer was asked. Sales guy had no idea how I got to his lot.

          • 0 avatar
            dal20402

            I searched “used highlander hybrid near me” and the first 15 Google results were various third-party search sites. Even if people are doing that now, the results will be very different if the third-party search sites go away.

      • 0 avatar
        SCE to AUX

        “If dealers don’t immediately chop all of their classified spends and put that money directly into search engine optimization, search engine marketing, and data mining, they deserve to die.”

        Bark – I think you’re suggesting:
        1. That sales are produced via ad clicks on search engines.
        2. That sales are/will be produced by consumers responding to dealer contacts produced via data mining.

        If so, that’s counter to my own buying experience. I’m the sort who knows what I’m looking for, and uses the tools to find it – particularly in new cars. Never once have I bought a car as a result of clicking on a “NOW REDUCED!!!” ad. Maybe some people do.

        But I have switched preferences while on the dealer lot, for both new and used.

        Overall, it sounds like the foursquare won’t go away.

  • avatar
    87 Morgan

    Interesting thoughts on the used car sites; the automotive version of the MLS for real estate.

    From a consumer perspective, I have used them all and rely on them. I am the polar opposite of Vulpine who only buys new and custom orders; I only buy used at this point. I have bought 5 new cars in the past, the longest I owned one was 7 years the shortest was 30 days +- I don’t specifically recall, 2005 was the last year I purchased a new car and don’t imagine I will do it again, ever.

    For me, these sites are the only way to find the car that I am looking for and I don’t think the dealer base can ignore this market as a whole. It would be silly to not have your inventory ‘out there’ so to speak.

    As for the state of the retail auto business? Oh boy, buckle up. If Hertz/Dollar/Thrifty files BK and has to liquidate to satisfy creditors that could be 500k near new cars on the market in one day let alone the other rental car Co’s who have stacks of cars that I are languishing right now at airports all across the U.S. Couple this with 30M people who we know are unemployed, plus how many are trying to get into their states web site and can’t to begin the process? So comfortably 35M people were removed from the market and I think the number is significantly higher.

    • 0 avatar
      28-Cars-Later

      One of them will, but automatically wholesale will *not* dip because of it as it had not done in 2018 and 2019 as predicted in 2017 by Morgan Stanley. I wouldn’t be surprised if the rental vehicles were crushed or exported, for the children, er, virus. The “system” cannot take the massive paper losses it needed too for years now and not crash. If wholesale actually does dip by the end of Q2, it will be because of the ripple effects of questionably legal lock down tactics not specifically because of market forces.

    • 0 avatar
      SaulTigh

      Judging by the proposals for aid and assistance being bandied about, a Freedom Cars for the People Act cannot be far away. Congress is going to go full Oprah…you get a car, and you get a car and YOU get a car!

      • 0 avatar
        87 Morgan

        Ugh. I really hope this talk of a second round of C4C dies quickly. Just let the retail auto business work its way through this.

        As for the Morgan Stanley predictions, from what I have read or not read, their has not been an accurate count of the # of cars that are supposedly stacking up at the auctions. While I believe a glut exists in the system, hard to tell exactly what that is at this point.

        • 0 avatar
          gasser

          With the incredible nose dive in business travel and vacations, I don’t think that any auto rental company is doing well. Even if Hertz doesn’t go BK, it will need to seriously downsize, along with the other rental outlets. As is noted above, 35 million people are now on the dole, and probably not looking for a car. I don’t think that used cars will be exported, because where in the world is there an auto shortage, especially of the larger, less fuel efficient vehicles we have here? I think that price cuts in used autos are the only way to try to move the glut out of the system. I doubt that any manufacturer will be seeing “fleet sales” this year.

  • avatar
    jalop1991

    Car prices have gone up FAR faster than the rate of inflation, and for what it’s worth, the fact that that was never sustainable is now revealed.

    That there exists a $30K Corolla (well, maybe there doesn’t, but you get the idea) doesn’t mean the $18K Corolla isn’t perfectly good. People will now understand that.

    Perhaps Millenials and Gen Z will, 40-60 years from now, be known by their grandkids as having grown up in the Depression.

    • 0 avatar
      Dave M.

      I want to add that cars have never been better than they are today – safer, more reliable, more efficient. I just helped a friend land a Kia Forte EX Sedan. Sunroof, “leather”, heated/cooled seats, 35 mpg, all the safety stuff. 19k + ttl. Unbelievable car that’s going to last her 10+ years. Pretty sharp looking too.

    • 0 avatar
      jack4x

      “Car prices have gone up FAR faster than the rate of inflation”

      Not really.

      Average new car cost in:

      1960: $2600 (inflation adjusted $23k)
      1970: $3450 ($23k)
      1980: $7200 ($23k)
      1990: $16,950 ($33k)
      2000: $21,050 ($32k)
      2010: $29,200 ($35k)
      2019: $36k

      Virtually no change in real dollars since the 80s, despite exponential improvements in basically every way. I have said it a million times, but it bears repeating again. There was no time in American history when the average new car was affordable to someone making the average wage.

      • 0 avatar
        ajla

        “There was no time in American history when the average new car was affordable to someone making the average wage.”

        Just to be pedantic, the 1920s?

        The Model T was the “average car” and it started at $265 (inflation-adjusted around $3.9K) for the runabout and the “touring” version was $295 ($4.4K). The average income in ’24 was $2,196 ($33K).

        So about 13% compared to 60% in 2019.

        • 0 avatar
          jack4x

          To be pedantic right back, the Model T base price wouldn’t be the “average” in the same way that a Corolla or Escape or something now doesn’t base at $36k. The average transaction cost would be brought up by all the other cars sold and the data I found doesn’t go back that far.

          But I concede that the 20s were the best chance for people to buy cars and the late Model T was almost inconceivably cheap. I’ll amend my statement from “never” to “since WWII”.

  • avatar
    el scotto

    Other than the opportunity for the dealership owner to get himself, wife & kids, and possibly grand kids on TV, does individual car dealership advertising have any real purpose? I mean the Ford dealership sells Fords, the Chevrolet dealership, sells Chevy, etc. Kinda like a grocery advertising they sell food. Does the dealership owner and his sales manager actually expect someone to like their horrid dealership website, be constantly harassed by salesmen “dialing for dollars” and expect that to generate sales leads? In short, you’re describing an environment where sales leads are attempted to be sold to salesmen. Car dealers should computerize and simplify the car buying process. Ideally my purchase contract should have four boxes: 1. Vehicle Selling Price, 2: Trade in Value, 3: Actual price of the vehicle, 4: name of financial institution financing. Possible 5th box: manufacturers extended warranty. Of course, such a form would have many more boxes to be checked that would allow more dealer deception; err dealer added value to the customer. Anyway, fill in the boxes to my satisfaction and tell me when it’s time to sign. Perhaps Carmax’s sales will rise due to their simplified, but usually more expensive, buying process.

    • 0 avatar

      The mistake you’re making is assuming that everybody shops for cars the same way that you do. That’s very far from being true.

      • 0 avatar
        Lie2me

        I bet those giant, blow-up wavy guys in front of the dealer still brings ’em in, huh?

        Free hot dogs?

        The guy in the bear suit jumping up and down along the highway waving people in?

        The old guy in the gif yelling, “It’s happening”?

      • 0 avatar
        el scotto

        @ Mark, how do people shop for cars? From what I understand you explain to dealers how a customer actually got on their lot. My last car purchase involved using AT/Cars.com, found the car I liked, called the dealer, test drove, liked the deal, bought the car. Was my phone call an anomaly or a statistic you can provide to a dealer? All this is asked with the understanding you’ve signed multiple NDA’s. One final question; does living in a major metropolitan where off lease luxury vehicles abound skew sales expectations?

  • avatar
    Dave M.

    My last 3 new car purchases (2013, 2015, 2020) have happened via Autotrader or more recently CarGurus. They were all seamless, transparent and stress free. Sorry Bark but I don’t see those services dying out anytime soon, especially when people are willing to get on a plane to fly to get exactly the car they want for a price that is in their wheelhouse.

    • 0 avatar

      2013 and 2015? Sure, that makes sense. I worked for AutoTrader during those days, if you weren’t aware. The wheels were already kinda falling off by 2015, and were all the way off in 2016.

      If you are genuinely interested in such things, do a little googling around on CarGurus and what happened with them in 2019.

      • 0 avatar
        Adub

        But so what does generate car sales then? Do most buyers google a specific model, read about some options, and then go to the local dealer?

        My experience being involved in three car purchases the past three years has lead me to conclude that most brand websites are worthless, and even if a dealership website is okay, the breadth of search area from autotrader makes it the superior platform for used cars.

        • 0 avatar
          psychoboy

          you were very close:

          A buyer googles a model, ballparks the cost of an ideal build, goes to the local dealer, finds that his ideal build does not exist (he has to buy the $15000 premium trim package to get the interior option that drew him to the model in the first place) or that they don’t have the options he wants in the right color on the lot, so after an hour or so of “searching” the salesman tells the buyer that his ideal build just isn’t available anywhere for dealer trade, but they’ll make him a great deal on whatever he wants to test drive (just as soon as he signs this foursquare that says he’ll buy it if he likes it). Then after a 4 block test drive on an approved route, if he doesn’t run screaming from the building, they’ll remind him of the signed promise to buy and the buyer will spend another hour or so waiting for the finance department to squeeze any remaining cash out of him.

          He’ll take the long way home to enjoy his new purchase and he’ll notice his impossible-to-find ideal build in the right color sitting on the front row at the other dealer in town.

      • 0 avatar
        Dave M.

        Bark, I’ve googled but have seen nothing beyond new advertising motifs. What am I missing?

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • Vulpine: @Old_WRX: “and the lack of any control to compare outcomes with it is a matter of estimation. Couldn’t...
  • slavuta: Biden said all we need to know youtube.com/watch?v=MA8a2g6tTp 0​
  • slavuta: Biden said this himself youtube.com/watch?v=MA8a2g6tTp 0​
  • Luke42: The Tesla Cybertruck is likely to win in the marketplace. It costs less, and has greater range. It also is...
  • Luke42: @Illan, “i wonder what the EV evangelist think of this.” Being pretty deep into the green car...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Matthew Guy
  • Timothy Cain
  • Adam Tonge
  • Bozi Tatarevic
  • Chris Tonn
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber