Madera Auto Center has adopted a service that allows customers to complete most of a car purchase online. Three people have gone all the way to make a purchase with the online tool in about a month and a half.
Written by David Castellon
Some say the days of brick-and-mortar stores are numbered, as consumers increasingly go online to buy goods and services.
But that hasn’t held completely true for car dealerships, most of which use websites to hawk their inventories, promote deals and draw customers to their lots.
But those sites have fallen short in a big way, as customers couldn’t actually buy cars online.
At the Madera Auto Center, principal owner Marty Mayfohrt is looking to change that by offering visitors to his website, www.maderaauto.com, a “buy” function that allows them to go through most of the process of buying a car online, minimizing the time they have to be on his lots.
And it’s not just for people who cringe at the notion of dealing with salespeople, as these days large swaths of consumers prefer to do most of their buying online, said Mayfohrt, whose Toyota and Chevrolet dealerships added the buy feature to their websites about a month-and-a-half ago.
This isn’t something altogether new, said Mayfohrt, who first read about San Francisco-based Drive Motors in a December 2016 magazine article. The company provides digital capabilities essentially plugged into car dealership websites allowing customers to go through the process of buying a car directly on those sites.
The system has had success in the Bay Area, and Mayfohrt and his staff decided to try it at their Madera dealerships.
Over the past several years, most auto dealerships in the country have had some sort of “online footprint” in which people could look at the inventories of their cars, see photos of them, get information about them, check CARFAX reports and get some financing information.
“But you lacked the ability to close the deal. You would still have to go to the dealership to close the deal,” Mayfohrt said, explaining that potential customers would have to leave contact information and wait for sales people to call or message them in order to haggle selling prices and, in some cases, to arrange financing.
The new technology that Drive Motors and a couple of other services that Mayfohrt has heard of are expanding those capabilities, allowing customers to do all the things dealer websites could do in the past, along with the new abilities to apply for financing, lock down prices on new and used cars and purchase after-market products — including fabric protection and extended warranties — all from their computers, tablets or smart phones, even at 1 a.m.
“The thing you can do past this point is appraise your existing vehicle to see what it’s worth” for trade-in based on Blue Book values, he said.
Once all of this is done, you can click on an icon to buy the car and arrange a time to pick it up or, in the case of the Madera dealerships, have it delivered.
“It’s very quick and very clean,” said Mayfohrt, adding that because of California law, all direct interaction dealerships and his staff can’t be eliminated.
“So far as I know, we are the only state that doesn’t allow electronic contracts [to buy] cars,” said Brian Maas, president of the California New Car Dealers Association, which is lobbying for legislation to rescind the requirement that a buyer has to sign a paper purchase contract for a car.
In the meantime, he said of Drive Motors and similar services, “I don’t have a specific number for you, but I do know there are a lot of folks paying attention to this type of [service],” some of then plugged into dealer websites and some essentially working as third-party brokers with the car dealers.
“They are trying to take the features that would be done at dealerships and move it online, akin to what [customers] are used to experiencing when buying other products online.”
Drive Motors officials wouldn’t disclose a list of dealerships in the Central Valley the company works with, nor is it clear what percentage of dealers in California and the rest of the country are selling cars in this manner.
As for the Madera Auto Center, Mayfohrt said several people have tried out the system, filling out the information and selecting the financing, add-ons, etc., but most stopped short of completing the process.
And so far, only three people have gone all the way to make a purchase with the online tools.
That may not seem like many, but Mayfohrt said that for something new “that’s very, very good, because you still have people who don’t feel comfortable making a major purchase like this online,” nor are many aware they can buy cars this way.
In addition, he said, this is new technology, and Valley residents tend to embrace new technology at a slower pace than people in the Bay Area.
Mayfohrt noted that besides the three sales, the web tool generated 10 leads — people who discussed buying cars with his sales people but didn’t end up doing so.
And all those buyers and leads were young adults, a demographic largely inclined to trying new technology.
Even then, they still mostly had reservations about going through the entire car-buying process online, without setting foot on a car lot, Mayfohrt said, noting that his first car buyer who used the online tool was convinced by his wife to come in with his family to first test drive the Toyota Prius to ensure it drove well and that the adults and children all fit in it comfortably before finalizing the deal.
“I don’t think anyone has taken the delivery yet,” he said.
“The ones we’ve had so far, they are at an age where they think this is the next way to buy cars,” and they don’t want to go into a dealership until they have studied the prices and finance options on the website, but a car is such a big purchase that they want to first “kick the tire” and take it for a test drive.
Whether a car is picked up at the lot or delivered by one of his employees, Mayfohrt said buyers have to provide identification and sign paperwork to finalize the purchase and — if applicable — the financing before being handed the keys.
The buyers also have to provide payment for the cars — if the dealer hasn’t arranged full financing — at the dealership or give it to the person delivering the car.
And in the case of trade-ins, the car has to be inspected to ensure its condition matches the trade-in value negotiated online.
“You may think something is in perfect shape, we may think differently,” Mayfohrt said, noting that if the car has balled tires, a leaky engine or is in poorer shape than described by the customer during the online process, the deal may have to be renegotiated.
But when all is said and done, “Our goal, whether you use this tool or not, is to spend less time in the dealership,” Mayfohrt said.
“I don’t think right now you’ll see mass acceptance of it, because it’s going t take time to make people comfortable with the process” he said, adding that he expects it may take a year or two to find out if people here embrace buying cars online.
Until then, Mayfohrt expects a lot of people will essentially test-drive the online car-buying system. “I think what you are going to see is a lot of people use this tool and go all the way to the buy [prompt] and stop.”