Car Dealers Selling Cars Online:  Which Way Forward?

Shopping Carts for Car Dealers?  Brokers?  Third Party Leads?

Recently, I spent half a day with one of my favorite car dealers:  Tom Gill of Tom Gill Chevrolet in Florence, KY (part of greater Cincinnati).

Tom is one of my favorite car dealers for two reasons.  Not only is he a wonderful innovator who takes the time to work on his business and not just in it, but several years ago, he introduced me to the "Business of Character" program, which we both still participate in.

Since our conversation followed the twists and turns that many of you are pondering given the recent combination of:

• Lithia and AutoNation announcing that they have buy direct capabilities, AND
• The rather timely CapGemini study which found that 1 in 5 In Market Vehicle Shoppers would Buy Online if the capability existed

I thought I would share parts of our conversation.

Tom Gill:  "I have a 19 year old son.  He is NOT going to come in to the showroom to buy a car.  Nor are his friends.  If he can do it all online he will...  I'm not sure what the cut off in age is that feels this way, but my guess is it is somewhere in the mid-to-late 30's."

Tom Gill:  "AutoNation and Lithia are piloting a complete online shopping cart purchasing experience for cars.  We can either get out in front of this thing and continue to be leaders or we can allow our consumers to be skimmed away by others with a capability we do not have."

And I normally avoid talking about money in this newsletter series, since I try to keep the topics educational, but in this case it was pretty relevant to the conversation...

Tom Gill:  "Is this worth the upfront investment to do and are we comfortable with the ongoing fees?"

Donny Beckman, Internet Manager:  "Three cars.  We only need to sell three cars to recoup our set up fee for the shopping cart... and there is no monthly fee except for consumer usage and purchases after that... which means we are selling cars."

And that was it.  The Ai-Dealer shopping cart ecommerce territory for Chevrolet in Cincinnati is now taken (apparently there are 21 other Chevrolet dealers in this market of 5 million people who will have to wait for another provider to make one commercially available).

So what do you think?  Is the future of car dealers selling cars online going to become shopping cart ecommerce based?  Is it going to remain mired in the research online, buy offline model that is prevalent today?  Is it going to become a situation where third parties continue to dominate the car buying public's awareness and interest, then sell that in the form of leads to car dealers?  Are broker-like services such as ZAG and CarsDirect going to play a significant role in the market?  As a car dealer or manufacturer, how do you want it to be?

Post your thoughts and comments to these questions on our forum.

Then a brief personal note.  Black Friday is the anniversary of the live launch of Ai-Dealer's shopping cart ecommerce system for car dealers to be able to truly sell cars online to consumers.

Coincidence?  Ironic?

I don't know, but it has been fun so far.  I do genuinely love what I do and hope it comes through.  Speaking with Jeff Kerschner of Dealer Refresh (one of the widest-read blogs on car dealer technology trends) yesterday, Jeff said this to me...

"A year ago when I met you I said you were ahead of your time in that dealers and consumers weren't ready to adopt an online buy-direct-from-the-dealer model.  Now I just think you saw where this was going, and got there first."

Thank you Jeff and Tom for letting me use your comments in this anniversary post.  Thank you also to all of Ai-Dealer's customers.