Posts Tagged ‘santanderconsumerusa’

Car shoppers think dealers make a lot of money on each vehicle transaction

car shoppersCar buyers think auto dealers make a lot more money than they really do on the sale of each vehicle – five times as much – according to a survey conducted for TrueCar Inc.

And that sort of misperception is bad for business, according to the TrueCar Buyer Study.

“The TrueCar Buyer Study results show that fear and mistrust have a cost in the car buying process,” said Scott Painter, TrueCar founder and CEO, in assessing the survey results.

“The survey showed that roughly 26 percent of car buyers feel that they overpaid for their purchase and that 32 percent stated they would not return to the same dealership due to low customer satisfaction with the purchase process,” reported TrueCar, a negotiation-free, car-buying-and-selling platform.

On a $30,000 vehicle, shoppers think dealers make about 20 percent profit margin, the TrueCar study reported, while the typical margin actually was just under 4 percent in 2013, according to the National Automobile Dealers Association (NADA). That 20 percent translates to a $6,000 profit, which is almost $4,900 more than a dealer’s actual average profit of $1,140.

At the same time, car buyers would be willing to pay dealers more than their typical profit margin – an average of 10-12 percent was considered fair – if they had confidence in the car-buying process.

And what if car buyers knew dealers would make nothing on a vehicle transaction?

They would be willing to “tip” dealers around 8 percent ($2,400), according to the TrueCar study, more than double the actual average profit margin.

“If consumers believed that they were getting information that they could trust as part of a more transparent process, they would be willing to pay dealers more,” said Painter. “These survey results are consistent with the idea that increased transparency in the car-buying process can result in higher margins for dealers and greater consumer satisfaction – everyone wins.”

“This survey is further validation of something we hold dear at TrueCar,” said John Krafcik, TrueCar president, “That providing price confidence to buyer and sellers will bridge the trust gap.”

The study was conducted in February and surveyed more than 3,000 consumers across the country.

TrueCar works with a national network of 8,000 dealers.

 

Long-promised, multi-list auction website ready for prime time?

auto auction

 

Developers of an online multi-listing solution that would allow bids on vehicles offered at various auto auction websites say they are making progress on finally bringing that project to fruition – almost certainly by the end of the year.

Manheim President Sandy Schwartz said that some players in the auto auction business had questioned why the company would want to be involved with a so-called “multiplatform” solution, considering that it already has the most cars and is, by far, the largest of the auction sites.

“My feeling is that’s what business is for, in the end,” Schwartz said. “I don’t mean this to be at all arrogant, but let the best man win. If we’re the ones that can sell that car, we should be able to sell it.”

Schwartz told attendees at the recent National Auto Finance Conference in Fort Worth that his company and the other platform developers would meet with the U.S. Department of Justice to allay any concerns that the solution would chill competition.

The Manheim executive said the technology is currently being built, and told the Texas audience that he’s really hoping a working model will be online by the third quarter this year.

At the latest, Schwartz said, the model should be good to go by the fourth quarter.

That means that by the first of the year, there will be a multiplatform bidding solution where buyers can look at most wholesale cars available (SmartAuction is not participating in the project).

“Who is selling it shouldn’t be important. What should be important to you is, ‘Is this a car I would buy in a live bidding?’” said Schwartz.

Joe McCloskey, owner of Colorado-based McCloskey Motors, said that if the platform enables vehicles from multiple sites to be purchased in one place, the site could bring some much-needed simplicity to the auction process.

“One-stop shopping would be great,” he said.

Skepticism about the site remains among many in the industry, but that didn’t dampen Schwartz’s enthusiasm in Fort Worth.

“I would just tell you, it’s not easy to get Manheim, ADESA and all the independents aligned,” he said. “But we are really focused on this moving forward and are the biggest proponent of it.”

– Cody Lyon

June vehicle sales appear mixed, but all signs point to strong 2014

car sales

(Photo: autoblog.com)

 

June new-vehicle sales might have looked like a mixed bag to a casual observer.

Sales were down from May, which was a torrid sales month, but up over June of 2013. And then there were the strong second quarter and six-months’ results and expectations for the year.

All told, analysts suggested, there were signs the industry could have its best year since at least 2007.

“Summer selling season is off to a better start than last year, despite one fewer weekend this June,” said John Krafcik, president of TrueCar Inc. “Strong retail sales and stable incentive spending heading into the heart of summer give us confidence that 2014 will be the best year for automakers since 2007.”

“It’s important to recognize that June sales are being heavily influenced by a quirk of the industry sales calendar,” said John Humphrey of J.D. Power’s global automotive practice. “When combined, May and June retail sales are expected to be up 7.2 percent, compared with May and June 2013, which underscores the continued positive trajectory in growth and overall health of the industry.”

J.D. Power also expected total new-vehicle retail sales to reach 6.5 million for the first half of 2014, a 6 percent increase over the first half of 2013.

“An attractive collection of new models as well as improved affordability due to very low interest rates and lease specials continued to bring customers into showrooms,” said Jesse Toprak, chief analyst for Cars.com. “We expect the rest of 2014 to continue to track above 16 million units.”

The Seasonally Adjusted Annual Rate (SAAR), an industry measure of sales of cars and light trucks, topped 16.9 million for June, which actually was slightly higher than the May SAAR.

Retail sales were expected to be down 10-15 percent from May, according to sources such as TrueCar Inc., Cars.comand Kelley Blue Book, but analysts generally attributed that to fewer selling days. June typically is a slower sales month than May because of summer vacations.

***

Meanwhile, used car sales through the midpoint of 2014 also were expected to increase over 2013, according to a report by Joe Overby, editor at Auto Remarketing.

Overby cited CNW Research’s latest Retail Automotive Survey in which the firm was predicting June used-car sales to be just under 4.5 million units, pushing the six-month figure to 20.33 million. The mid-year mark would be a 0.9 percent increase from the pace of 2013, CNW indicated.

 

– Mark Macesich

GreenLight Remarketing: Electric vehicles, direct sales, more…

GreenLight RemarketingGreenLight Remarketing, Issue 22, is brought to you by the premier magazine about innovative automotive remarketing and Santander Consumer USA Inc.

This edition features:

Electric slide
Electric vehicles cost more initially, but does their value hold when those vehicles are being remarketed? Not so far, experts say, due to lack of incentives and tax credits on resold vehicles compared to new EVs, the learning curve remarketers face in selling to a different kind of buyer, and “range anxiety” and other technology-related issues that are similar to new-vehicle sales. READ MORE

Dealing direct
A new tool from RedBumper promises to connect dealers directly to consumers seeking to sell their cars. The appeal of the tool, called CarOffer, is that dealers can have exclusive access to certain population or area, and sell the consumers a car to replace the one the dealer has just bought – effectively making the transaction a trade-in. READ MORE

Little cars, big supply
The performance and styling of small cars keeps getting better, and many cost-conscious consumers have taken advantage of that. Meanwhile, the popularity of subcompacts is starting to be felt in the auction lanes, where supplies of used vehicles already are growing. So, what’s in store for subcompacts as Americans gravitate to larger cars with an improving economy? READ MORE

Digital express lane
Avis is avoiding the auction lanes to sell straight to dealers with a program called AvisDirect. While Avis has sold directly to dealers in the past on a regional level, this program marks the first time the company is selling its lightly used and highly desirable vehicles on a national level. READ MORE

And more …
Read our listings of Active Auctions, a note from Brent Huisman, SVP of Asset Remarketing at Santander Consumer USA Inc., and a report on pricing from ADESA’s Tom Kontos. Download your issue of GreenLight Remarketing and keep up with remarketing trends and opportunities.

Survey seeks to identify 2014 vehicle remarketing trends

auction buyers survey

Auction buyers have a chance to help improve understanding of current automotive remarketing trends by participating in a survey presented online by Royal Media Inc. with support from Santander Consumer USA Inc. (SCUSA).

Survey results will help the companies provide the best possible support to buyers’ remarketing efforts.

Royal Media publishes GreenLight Remarketing magazine, while Santander is a leading auto lender with relationships that comprise nearly 14,000 dealerships in the United States.

“Santander Consumer USA invites you to participate in a survey of automobile auction buyers to help us fine tune our understanding of the remarketing marketplace and what you, our customers, want and need in auction services and inventory,” said Mitch O’Neil, assistant vice president of remarketing at Santander in an email to auction buyers.

The invitation was emailed to buyers by auctions such as ADESA, Manheim and Brasher’s.

The questionnaire, SCUSA Remarketing 2014 Buyer Survey, will be available to auction buyers June 27 through July 11, and responding should take only a couple minutes.

The survey includes questions such as:

  • How did your purchase volume per channel trend in the first quarter of 2014?
  • Which vehicle segment currently provides you with the best resale value?
  • Are you aware of the relationship between Santander and Chrysler Capital?
  • What is the most important information you need to see on an internet condition report?

Overall results of the remarketing buyer survey, featuring key trends, will be reported in GreenLight Remarketing, a publication for remarketing professionals, which will be available at the auctions or online at Inside Lane (formerly GreenLight to Drive).

GreenLight Remarketing, SCUSA and the auctions will share results of the survey.

The invitation to auction buyers to participate includes a link to the survey. Here is a survey link for auction buyers who wish to participate but might not have received an emailed invitation.

– Mark Macesich

Many vehicle service customers would rather go to the dentist, survey shows

service customerMost dealerships are trying harder than ever to take care of their service customers, but that doesn’t mean consumer opinions about how dealerships and mechanics/technicians service their vehicles are changing quickly.

In fact, 85 percent of customers rate getting their car serviced right up there with going to the dentist, and many women would actually prefer going to the dentist, according to the website AutoMD.

The survey was conducted in March and April of this year, with more than 2,400 online respondents answering questions about their service and repair experiences.

“We know that there are excellent repair shops and service centers in every city in the U.S., but, as this study shows, a persistent perception problem plagues the industry: Consumers simply don’t trust that they are paying an appropriate price for a repair and their view of the whole experience is, generally, not a positive one,” said Brian Hafer, vice president of marketing for AutoMD.com.

While women have a more negative view of the repair shop/service center experience than men do, across the board consumers say a more transparent process would improve the experience, according to the AutoMD survey. Consumers say that not knowing what a repair should cost is the biggest challenge in the process and that they want real “apples-to-apples” repair job quotes.

Among the major findings of the AutoMD survey are:

About 83 percent of those surveyed said they have “felt” overcharged for vehicle service at the repair shop or dealership, a number that has edged downward but has remained stubbornly high over the past four years: This year’s percentage compares with 85 percent in 2012 and 88 percent in 2010.

 A whopping 86 percent said that the repair experience ought to be more transparent.

Overall, 84 percent said that getting comparable repair price quotes, available for most goods online, is either “important” or a “must have” in the auto-repair process. And 91 percent said knowing the specific part to be used – and its price – was either “important” or a “must have.”

Almost two-thirds, 65 percent, said they have looked at reviews before going to a repair shop/service center, with women at 73 percent considerably more likely to do so than men at 64 percent.

There is opportunity for dealerships in the survey results, according to Hafer of AutoMD:

“Consumers are going online to check price quotes and repair shop reviews and are craving actual job quotes. So, for shops that are pricing fairly, offering real quotes and keeping up a good digital presence, there is a real chance to improve perception – and, with it, their business.”

– Mark Macesich

Study leaves little doubt about impact of Internet on vehicle sales

vehicle salesIf any dealer doubted that the Internet can have a significant impact on vehicle sales, let us be among those to dispel that doubt.

Not only are more and more shoppers getting information online, but positive online reviews are driving them to dealer websites, and those shoppers also are more likely to convert to actual leads.

“The Internet continues to drive traffic to used car sellers,” said Art Spinella of CNW Research. “In April, the number of shoppers that went to a dealership because of something seen on the Internet jumped 116 percent versus a year ago and nearly 28 percent versus March of this year.”

And a recent study from DealerRater and Dataium showed that Internet shoppers were 90 percent more likely to visit a dealer website and 5.3 times more likely to convert to a lead with a good online rating (3.5 of 5 stars or higher at DealerRater), according to a report at AutoRemarketing.com.

Shoppers reacted even stronger to dealers that provided employee profiles online as they were more than 12 times as likely to submit a lead to dealers, reported DealerRater, a car dealer review website.

“The study validates what we’ve advised dealers for years,” said Gary Tucker, DealerRater’s chief executive, in the story at AutoRemarketing.com. “Dealer reviews have a clear impact on the behavior of today’s auto shoppers. And the fact that automobile shoppers are more engaged … reveals that consumers are looking for more transparency as they research dealers.”

That transparency comes in the form of “detailed reviews that provide a clear idea of what to expect from the car-buying process” when comparing multiple dealerships, Tucker said.

“Online reviews have already helped consumers in the car-buying process, but now we’re looking at the other side of the relationship by showing how dealers can benefit from reviews,” Eric Brown of Dataium told AutoRemarketing. “The numbers speak for themselves: Dealers that provide great customer service are receiving positive online reviews that, in turn, attract and convert more shoppers.”

While the study was based on Dataium’s analysis of dealership website traffic and DealerRater review profiles for more than 1,000 dealers, it seems to hold useful insight for all dealers.

Dealers that aren’t effectively using the Internet to attract shoppers are leaving sales on the table.

– Mark Macesich

Knowing customers key to dealers’ social media success

social mediaHow well do you know your customer?

If the answer is, “well” or “very well,” then you have fundamentally what it takes for effective social media marketing that will inspire loyalty from your customers, because you’ll be able to provide the sort of online content that will keep them coming back for more.

Of course, you even may pick up a few new customers along the way via your social media marketing.

However, if your answer is, “not very well,” then, obviously, you have work to do, especially with social media marketing, which is, first and foremost, social.

You can’t help your customers or gain new customers if you don’t know them well enough.

“Instead of waking up to find that your business is only as good as the next transaction, embark on a quest to foster loyalty through social selling,” writes Kathi Kruse, author and consultant, in Auto Remarketing. “Build a network of happy, loyal customers who like doing business with you.”

Kruse provides three social selling tips to inspire loyalty and avoid the “one night stand” transaction:

Let your “why” permeate throughout your message. “The clearest way to a prospect’s heart is to know something about them and incorporate that in your message,” Kruse writes. Facebook, Pinterest and Instagram posts, blog posts and tweets “should center on teaching your customer how to buy. The more you know them, the easier it will be to create content that delights.

Constantly provide value. As a consultant, Kruse guides her clients to be content producers, not just content consumers, because then they can provide a good social media experience. Contributing to conversations “solidifies relationships and converts them into sales.”

Think from the customer’s point of view. Many businesses may be perceived positively, but automotive retail is not one of those, Kruse writes. Dealers must be courageous enough to ask on social media whether people like doing business with them.  “They will define what service excellence means,” she writes. “ Then all you have to do is give it to them. If people like doing business with you, they’ll probably want to come back more often.”

With social media now a part of the marketing landscape, it’s more important than ever to know your customers well and to be able to act on that effectively through social media channels.

– Mark Macesich

Auto sales animated by recovery, low interest, attractive new vehicles

auto salesMay was a very good month for auto sales.

GM, Chrysler and Toyota reported their best sales since before the start of the recession in 2008, while Ford Motor Company did them one better – or should we say three – with its best sales since May 2005.

Meanwhile, among European automakers, Audi and Porsche had their best sales month ever in the United States and BMW reported its best May results ever. Nissan also set a sales record for May and Hyundai Motor Co. recorded its best month ever, Reuters reported.

Industry sales totaled 1.6 million vehicles with a seasonally adjusted annualized selling rate (SAAR) of 16.8 million cars and light trucks, according to Autodata Corp. market research company.

The results “blew away” analysts’ expectations of 16.1 million SAAR, reported Business Insider.

GM’s May sales increase of 12.6 percent nearly doubled expectations despite recall issues and concerns about the amount of time it took the automaker to report some problems, demonstrating, ABC News reported, that “car buyers are willing to forget the past and look at the present and future for GM.”

Premium models along with small and mid-size crossovers led the way to higher-than-expected results.

“Nearly one-half of the new-model activity in 2014 will be premium vehicles, which is expected to create new competition for mainstream segments,” Jeff Schuster, senior vice president of forecasting at LMC Automotive, told Nelson Ireson at The Car Connection auto research website.

Ken Brauer, Kelley Blue Book senior analyst, cited sales strength among crossover vehicles.

“Supporting this increased appetite for more expensive, more premium vehicles is a trend toward longer loan terms in the automotive financing market,” Ireson wrote.

Experian Automotive reports the average loan term has reached a record high 66 months, while loans with terms of 73-84 months grew 27.6 percent in the first quarter of 2014, accounting for 24.9 percent of all new vehicle loans issued, according to Ireson’s Car Connection report.

“Credit conditions are making it easier to buy or lease a new car,” said Jessica Caldwell, Edmunds.com analyst. “Shoppers are opting for longer terms at lower interest rates. In other words, they’re able to afford more expensive cars by keeping their monthly payments at or near what they’re used to paying.”

The surge in auto sales the last three months has begun to make up for the slow start to the year because of severe weather in the U.S. North and East in January and February.

“It’s the continued recovery in the summer selling season,” Shuster of LMC told the Associated Press. “Kind of everything aligning in the month of May.”

Analysts expect June to bring more of the same because of low interest rates, good lease deals and attractive new vehicles.

– Mark Macesich

Finding the sweet spot in used car sales

used carIf you’re looking for the sweet spot in which vehicles will work for your used sales department, it could be the vehicles that are up to 5 years old – designated certified pre-owned.

Sales of vehicles ages 1 to 5 were especially “hot” in April, rising 9 percent over 2013, according to CNW market research and reported by AutoRemarketing.com. Overall used vehicle sales rose just 3.65 percent.

Meanwhile, nearly 200,000 certified pre-owned vehicles were sold during the month, a 9.5 percent jump over the numbers from a year ago.

Coincidence? Probably not, suggests Joel Overby, editor of AutoRemarketing.

Which automakers saw the most movement among certified pre-owned vehicles?

  • Asian automakers, with 91,027 vehicles sold
  • The Big Three, which sold 68,253 certified vehicles
  • European automakers, with 33,811 sold

And even with the second place finish in total used sales, U.S manufacturers saw an increase of 13.5 percent from the previous year. Otherwise, European automakers gained 12.1 percent and Asian carmakers 5.8 percent.

For the first four months of the year, the total number of certified units sold reached nearly 750,000, an increase of 10.5 percent over last year – and that’s just for franchised dealers. If you throw in independent dealers and private party sales, the April numbers jump to nearly 4 million units sold.

CNW research analyst Art Spinella attributes this to the power of the Internet.

“The Internet continues to drive traffic to used car sellers,” Spinella explains. “In April, the number of shoppers who went to a dealership because of something seen on the Internet jumped 116 percent versus a year ago.”

No matter what the reason is, certified pre-owned vehicles between one and five years old seem to be the secret weapon of increased auto sales. So if you’re looking for the new inventory for the used vehicle department, you may want to look at some later model units because it appears that the secret is out.

– LaQuenda Jackson