TrueCar Leads the Horseless Carriage to Water…

…but Dealerships Aren’t Drinking.

A few years ago, my wife and I leased a car. The path to getting that car was miserable, and I hesitate to name the dealership only because it’s just as miserable everywhere. The negotiating, the inventory, the pushy sales guy. It’s awful. Everyone hates it. But…

2 weeks ago, we purchased a minivan. Why? Because we’re having our second kid and moving out to the suburbs, and that, my friend, is AWESOME. No sarcasm. You know what fits in a minivan? A new grill. A million footballs. Lumber.

Sign me up.

Enter TrueCar

I was ecstatic to discover TrueCar. If you haven’t encountered them, they provide:

1. Market data on the “true” price people have paid for a car historically
2. A pre-negotiated price with 3 local dealerships so that you really don’t have to negotiate

The second part is really the magic-sauce. In theory, you do your homework in the comfort of your home, you play around with options and trim, and by the time you walk into the dealership, you have a guaranteed price in hand, and that’s your number. Done and done.

Because I had to drive all over town looking for inventory when I went to lease our last car, I tried to get out ahead of the process this time and confirm inventory. Via Truecar I agreed to receive emails from 3 Toyota dealerships and 3 Honda dealerships. I checked with all 6 to confirm inventory in advance of driving out. All 6 gave me the Sullivan Nod and confirmed that, yes, of course, they have it in stock. Just come in. (“But I haven’t even told you which car I want yet!”) Yes, they have all three colors we want to see. Just come in. Would today work to come in? Shut up! Just. Come. In.

The following weekend, my wife and I got a babysitter and left the house with appointments confirmed at 2 dealerships. Total nerds, we had all our research, inventory re-confirmed that morning, an iPad, and Truecar print-outs with guaranteed prices. We would test drive the two cars, pick our favorite, and buy on the spot. I couldn’t wait. Let the golden era of car buying begin!

The Test Drive

What a disaster.

1. We arrive at the dealership and there are 5-6 vultures outside the main door waiting to snap us up
2. It doesn’t matter that we have an appointment with the Internet Sales Manager. The first guy drag us all the way across the dealership to sit down at his desk and “discuss our needs”
3. We tell him we are there to test drive the [very specific model/trim]. He tells us they don’t have it in stock, but it doesn’t matter because [this other model] drives the same
4. We tell them we just confirmed inventory with Sally this morning, and the cocky salesperson laughs at us (he really did!) and explains that Sally would have no idea from her “Internet Sales Office” (his air-quotes, not mine) and that her computer is updated every couple days at best. Silly Internet Sales and their silly computers.

Brief aside: Doubtless, Sally knows this reality but has been coached to say “yes” to any inventory inquiry regardless. I am not even sure she has access to an inventory system. I envision her as an orc in a cave somewhere answering, “yes. just come in,” with perfect regional dialect to every inquiry globally as she picks goat meat out of her grey, greasy teeth.

Impossibly, the precise experience I describe above occurred both at Toyota and Honda. Amazing, actually. In each case we test drove a model that wasn’t really what we were interested in buying, and we were left trying to make a decision without a lot more information than we came in with.

Oh, and “muscles-glasses,” my dedicated vulture, want to keep chatting with me about football…so much so and so insistently that my head starts hurting and I cannot concentrate on my list of things I wanted to check. “No, I don’t think Eli Manning is an elite quarterback.” Now let’s see, I wanted to test parallel parking this tank without the back-up sensors. “Yep, it’s tough being a Pats fan 6 miles from the Meadowlands. Sorry,” I apologize, “ can you help me understand how these seats fold down?”

The Purchase

Once we decided to go with the Odyssey, you would have thought we could finally downshift into TrueCar auto-pilot. Unfortunately, since they don’t have that specific car in inventory (or anything like it in North Jersey, evidently), we’re back to negotiating. The car they want to put me in is missing things I want and comes with things I do not (the “Appearance Package” is pretty low on my list), but somehow I need to pay for this.

“Obviously we can’t remove the appearance package!”

Indeed.

Item by item, my guaranteed price begins feeling naive. My stomach is tightening, and I envision a frustrated TrueCar product team cringing in a cartoon bubble over my right shoulder. Suddenly, dealership-reported inventory issues that didn’t exist on the web or over email are a costly problem. My costly problem. Honda’s own “Build your Odyssey” online experience seems to have been mocking me. Clicking to add and remove things felt so easy at home, and I was quite happy to pay $500 for those backup sensors. (What? Backup sensors need to be installed at the factory? Could I have gone there instead?)

Then, when we finally get our car delivered from their warehouse (and we sat around waiting an hour for this — not yet filling out paperwork), it didn’t have a DVD player. Why not? Dumbass customer. Because when you upgrade an EX-L to Nav they take out the DVD out! We didn’t know this. Neither the car we viewed inside nor the one we test drove was the car we were purchasing. So now we need to evaluate whether to go back to Toyota for the Sienna. Why would they take out the DVD when they add Nav! Damnit! Did the orc have a hand in this? How could I have squinted through so many 10px font comparison tables on their website without surfacing this magical insight?!

By the time my wife and I take 10 minutes to mull it over, our specific assigned vulture is onto a new customer, but we cannot switch to a new vulture. These vultures have rules. So we call our babysitter to extend her time and sit for 2 hours in instant coffee and powdered creamer purgatory while another customer executes a purchase with our salesperson. I feel a migraine coming on.

Our initial appointment was at 10:00am on a Saturday. By 4:30pm I had to jet to relieve the babysitter. Since I was leaving my poor pregnant wife at the dealership without a car, we left little doubt that we were buying that day, right? So much for leverage.

She wrapped up the miserable process by around 5:30pm and drove home exhausted. An entire day to test drive, purchase, and drive home a vehicle. By the time she had keys to the car, she relays to me, everyone was congratulating her and shaking her hand. Balloons were exchanged, confetti feel from the ceiling, but she wanted to either punch them or cry or both.

The New Buying Model

It doesn’t take a fortune teller to see this process is doomed. These car salespeople are going the way of the door-to-door encyclopedia salespeople. Given that the United Services Automobile Association is an investor in TrueCar, it would seem I am not the only one who realizes this.

The right model takes negotiation, transaction process, and inventory problems away from the consumer. Behold:

Pre-shopping at Home

1. As a buyer, I shop around online to compare features of various makes, models, and trims
2. At my leisure I observe cars in parking lots, read reviews, and talk to friends.
3. I use the “Build” features on the car manufacturers’ sites to play around and hone my specific options just like buying a laptop
4. Either I use TrueCar to find the real price (yes, there is a real price), or the auto dealers stop playing around and just tell me the real price themselves. No negotiation. No feeling like I got ripped off when I discover someone negotiated something better.

Remember when airline fares used to be tricky? After Priceline and Kayak provided transparency into pricing, pretty soon aa.com and delta.com just started showing the real price. No more games.

Test Drive

Car dealerships stop carrying individual dealership inventories. Note: By all indications they are half-way there already. Rather:

1. They make damned sure every model and base trim is available to view and test drive
2. They make damned sure one of every color is available to view.
3. They make damned sure that if I make an appointment to test drive a specific model and base trim, this means the car I requested is available.Those silly computers are actually quite good at this sort of thing.
4. Rather than test driving with a vulture, a member of the Internet Sales team facilitates the test drive

This Internet Sales diplomat doesn’t get a commission to make me purchase on the spot. Besides, we’re not even test driving something I can take home today. It’s about showing me the car and answering my questions so that I will want to purchase the car later.

This is the showcase retail model, and it’s beautiful. The point isn’t to move inventory in that moment. It is to sell the brand, to sell the experience of driving their cars. They want us to know they give free oil changes for 3 years and that they have the best service in the business — a claim no one could make the day we went out!

The Internet Sales team shouldn’t just be in the lead-generation business. They should be competing with the in-person sales team, eating their lunch. They should be incentivized on an entirely different model from the archaic vulture system. They should be an Apple Store and not a car dealership. Sorry, Governor Christie, but Elon Musk already knows this, and you need to get our of his way or get mowed down by a new Tesla Model X.

In any case, if they’re successful I leave knowing what the car is like to drive and what the colors look like. I have seen whether the DVD player is big enough to see from the back row and whether I can remove the seats before going to Home Depot. Ok, I get it. Thanks for your time. Good day.

In fact, wifey, I suspect we have enough time before we need to be back for the babysitter, we should grab me a quick beer while we think through our options!

Purchase

Once I know how the cars drive and have seen the options in person, I can make my mind up at home. Rather than dealing with each dealership’s wretched inventories — to say nothing for Route 22 itself — I can build my model to my specific requirements online. I can add the backup sensors without adding the appearance package. In each case, I know the real price and not the pretend price. Check, uncheck, confirm. Oooohhh…charcoal exterior…pretty.

I can also file all the financing documents online. This is obvious. I don’t want to sit in a sweaty dealership for 6 hours while these guys run the numbers and “go talk to their manager” about getting us 0.9% APR. There’s a 14 ft. sign outside advertising it. Of course he’s going to give it to us. You’re not our friend, skinny tie. We’re never going to see you again. Besides, my coffee is a lot better than theirs. Sip. Ahhh… Ok, click the green “Purchase” button and they can email me the confetti.

Then, the master stroke: Honda drives my new car out to me.

Rather than maintaining these ridiculous inventories on Route 22 or whatever ugly road is near you, with just a teaspoon of centrally-maintained inventory and a half cup of just-in-time manufacturing, it’s a snap to build to order and customize at a factory and not at a dealership. These guys are already driving cars from dealership to dealership and warehouse to dealership while creating a miserable customer experience. How much harder would it be for them to pair up and deliver a car to my door?

Shiny, new, with an actual bow on it? Sure! They show up, a pair of fresh-faced smiles in beige polo shirts, and then just sign here, here, here, and here. “Congratulations, Mr. Neary! You’re now a minivan owner. Welcome to your new life in suburbia!” High five. Air kick. In that peaceful moment, birds chirping, without a sale to push and without a fatigued, beaten-down customer…you have perhaps your best opportunity to be genuine and tee up the next sale. This is when and where a relationship is built.

It’s coming, as certain as death and taxes. The first manufacturers to get it right will sustain a competitive advantage until the rest of them catch up. Fact.

If you liked this article, I would humbly appreciate your recommendation or your sharing with others. Thanks for reading!